Maud'Dib Intergalactic has a new project available on Arrakis. The cost of the project is $39,500 and it will provide cash flows of $22,600, $28,800, and $29,100 over each of the next three years, respectively. Any cash earned in Arrakis is "blocked" and must be reinvested in the country for one year at an interest of 2.8 percent. The project has a required return of 9.2 percent. What is the projects's NPV?
Maud'Dib Intergalactic has a new project available on Arrakis. The cost of the project is $39,500...
Please show in details, not just answers thank you!
1.
2. Maud'Dib Intergalactic has a new project available on
Arrakis. The cost of the project is $38,000 and it will provide
cash flows of $21,400, $27,300, and $27,000 over each of the next
three years, respectively. Any cash earned in Arrakis is "blocked"
and must be reinvested in the country for one year at an interest
of 3.1 percent. The project has a required return of 8.9 percent.
What is...
Problem 5-25 NPV and IRR Butler International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow -$1,290,000 465,000 530,000 425,000 380,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these...
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year 0 Cash Flow 1,240,000 415,000 480,000 375,000 330,000 Nm All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 5...
IBM is evaluating a project in Eutopia. The project will create the following cash flows: Year $ 0 -1,330,000 1 250,000 2 470,000 3 450,000 4 215,000 5 95,000 All cash flows will occur in Eutopia and are expressed in dollars. In an attempt to improve its economy, the Eutopia’s government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment rate for these funds...
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year O -NM + Cash Flow 1,270,000 445,000 510,000 405,000 360,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is...
8) Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a required retum of 12 percent. Which of the following statements is MOST correct? A) Project A must have a higher NPV than Project B. B) Both projects have a positive net present value (NPV) C) Project B has a higher profitability index than Project A. D) If the required return were less than 12 percent,...
14 Problem 7-23 NPV and IRR Anderson International Limited is evaluating a project in Erewhon The project will create the following cash flows: 0 01,220.000 95.000 160,000 355.000 310,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds...
Butler International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 –$ 1,210,000 1 385,000 2 450,000 3 345,000 4 300,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment...
Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 –$ 1,230,000 1 405,000 2 470,000 3 365,000 4 320,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment...
Project A has a required return on 9.2 percent and cash flows of −$87,000, $32,600, $35,900, and $43,400 for Years 0 to 3, respectively. Project B has a required return of 12.7 percent and cash flows of −$85,000, $14,700, $21,200, and $89,800 for Years 0 to 3, respectively. Which project(s) should you accept based on net present value if the projects are mutually exclusive? Please show the calculations necessary to find NPV for each project.