Homework Answers
| 2% | 4% | 6% | 8% | 10% | 12% | 14% | 16% | 18% | 20% | 22% | 24% | 26% | 28% | 30% | |||||||||||||||||
| Year 0 | -468000 | 1 | -4,68,000.00 | 1 | -468000 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 | 1 | -4,68,000.00 |
| Year 1 | 135000 | 0.9804 | 1,32,352.94 | 0.9615 | 129807.692 | 0.9434 | 1,22,460.09 | 0.9259 | 1,13,388.97 | 0.9091 | 1,03,080.88 | 0.8929 | 92,036.50 | 0.8772 | 80,733.77 | 0.8621 | 69,598.08 | 0.8475 | 58,981.42 | 0.8333 | 49,151.19 | 0.8197 | 40,287.86 | 0.8065 | 32,490.21 | 0.7937 | 25,785.88 | 0.7813 | 20,145.22 | 0.7692 | 15,496.32 |
| Year 2 | 240000 | 0.9612 | 2,30,680.51 | 0.9246 | 221893.491 | 0.8900 | 1,97,484.42 | 0.8573 | 1,69,311.06 | 0.8264 | 1,39,926.49 | 0.7972 | 1,11,548.54 | 0.7695 | 85,832.98 | 0.7432 | 63,787.89 | 0.7182 | 45,811.47 | 0.6944 | 31,813.52 | 0.6719 | 21,374.31 | 0.6504 | 13,901.08 | 0.6299 | 8,756.04 | 0.6104 | 5,344.26 | 0.5917 | 3,162.28 |
| Year 3 | 185000 | 0.9423 | 1,74,329.63 | 0.8890 | 164464.326 | 0.8396 | 1,38,087.42 | 0.7938 | 1,09,618.25 | 0.7513 | 82,357.81 | 0.7118 | 58,620.66 | 0.6750 | 39,567.28 | 0.6407 | 25,349.08 | 0.6086 | 15,428.23 | 0.5787 | 8,928.38 | 0.5507 | 4,916.92 | 0.5245 | 2,578.86 | 0.4999 | 1,289.19 | 0.4768 | 614.73 | 0.4552 | 279.81 |
| Year 4 | 135000 | 0.9238 | 1,24,719.13 | 0.8548 | 115398.566 | 0.7921 | 91,406.47 | 0.7350 | 67,186.49 | 0.6830 | 45,889.27 | 0.6355 | 29,163.46 | 0.5921 | 17,267.11 | 0.5523 | 9,536.47 | 0.5158 | 4,918.81 | 0.4823 | 2,372.11 | 0.4514 | 1,070.77 | 0.4230 | 452.91 | 0.3968 | 179.69 | 0.3725 | 66.94 | 0.3501 | 23.44 |
| NPV | 1,94,082.21 | 1,63,564.08 | 81,438.40 | -8,495.24 | -96,745.54 | -1,76,630.83 | -2,44,598.86 | -2,99,728.48 | -3,42,860.07 | -3,75,734.81 | -4,00,350.15 | -4,18,576.94 | -4,31,989.20 | -4,41,828.85 | -4,49,038.15 | ||||||||||||||||
| IRR is the rate at which NPV become Zero | |||||||||||||||||||||||||||||||
| At 6% NPV = 81438.50 | |||||||||||||||||||||||||||||||
| At 8% NPV = -8495.24 | |||||||||||||||||||||||||||||||
| Hence IRR = 6% + (81438 / 81438+8495.24 ) x 2 | (This 2 is the difference between 8% -6%) | 7.81 | |||||||||||||||||||||||||||||
| So IRR is 7.81% approxi | |||||||||||||||||||||||||||||||
Add Answer to:
4. Lepton Industries has a project with the following projected cash flows: Initial Cost, Year 0:...
Net present value. Lepton Industries has a project with the following projected cash flows: a. Using...
Net present value. Lepton Industries has a project with the following projected cash flows: a. Using a discount rate of 10% for this project and the NPV model, determine whether the company should accept or reject this project. b. Should the company accept or reject it using a discount rate of 17%? c. Should the company accept or reject it using a discount rate of 20%? a. Using a discount rate of 10%, this project should be V. (Select from...
Net present value. Lepton Industries has a project with the following projected cash flows: 3: a....
Net present value. Lepton Industries has a project with the following projected cash flows: 3: a. Using a discount rate of 12% for this project and the NPV model, determine whether the company should accept or reject this project. b. Should the company accept or reject it using a discount rate of 17%? c. Should the company accept or reject it using a discount rate of 22%? a. Using a discount rate of 12%, this project should be . (Select...
P9-8 (similar to) EQuestion Help Net present value. Lepton Industries has a project with the following...
P9-8 (similar to) EQuestion Help Net present value. Lepton Industries has a project with the following projected cash flows: a. Using a discount rate of 9% for this project and the NPV model, determine whether the company should accept or reject this project b. Should the company accept or reject it using a discount rate of 17% ? c. Should the company accept or reject it using a discount rate of 20 %? . (Select from the drop-down menu.) a....
Consider Project Theta, its time line of cash flows, and one of the project IRRs: Year....................0.............1............2............IRR...
Consider Project Theta, its time line of cash flows, and one of the project IRRs: Year....................0.............1............2............IRR Cash Flow......($200).....$850....($700)......15% What is the best decision for Project Theta (accept or reject) if the project’s required rate of return is 15% and why? a. Accept the project because the payback is short b. Accept the project because the NPV is greater than zero c. Reject the project because the IRR is less than the required rate of return d. Reject the project because...
Consider Project Theta, its time line of cash flows, and one of the project IRRs: Year...................0..............1...............2...........IRR...
Consider Project Theta, its time line of cash flows, and one of the project IRRs: Year...................0..............1...............2...........IRR Cash Flow.....($200).....$850.......($700).......15% What is the best decision for Project Theta (accept or reject) if the project’s required rate of return is 15% and why? a. Reject the project because the NPV is less than zero b. Accept the project because the IRR is greater than zero c. Accept the project because the NPV is greater than zero d. Accept the project because the payback...
Internal rate of return and modified internal rate of return. Lepton Industries has three potential projects, all with...
Internal rate of return and modified internal rate of return. Lepton Industries has three potential projects, all with an initial cost of $1,700,000. Given the discount rate and the future cash flows of each project, what are the IRRs and MIRRs of the three projects for Lepton Industries? Cash Flow Project Q Project R Project S Year 1 $400,000 $600,000 $900,000 Year 2 $400,000 $600,000 $700,000 Year 3 $400,000 $600,000 $500,000 Year 4 $400,000 $600,000 $300,000 Year 5 $400,000...
A project has the following expected cash flows: Year 0 Year 1 Year 2 Year 3...
A project has the following expected cash flows: Year 0 Year 1 Year 2 Year 3 ($1,480) $640 $250 $300 Assume the risk-adjusted discount rate (k)(k) is 7.8%. Based on the IRR rule, should you accept or reject this project? Use Excel or a financial calculator. Cannot be determined. No, the project should be rejected. Yes, the project should be accepted.
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV...
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint: Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept (x-axis). Year 0 = -$240,000 Year 1 = $ 40,000 Year 2 = $ 79,000 Year 3 = $ 118,000 Year 4 = $ 131,000 What is the NPV of Project L-2 where zero is the discount rate?
Suppose you are offered a project with the following payments: Year Cash Flows 0 $ 9,700...
Suppose you are offered a project with the following payments: Year Cash Flows 0 $ 9,700 1. − 5,200 2. − 3,900 3. − 3,000 4. − 1,600 a. What is the IRR of this offer? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % b. If the appropriate discount rate is 14 percent, should you accept this offer? Accept Reject c. If the appropriate discount rate is 20...
Problems with IRR White Rock Services Inc. has an opportunity to make an investment with the...
Problems with IRR White Rock Services Inc. has an opportunity to make an investment with the following projected cash flows. Year Cash Flow 0 $1,680,000 1 -3,885,000 2 2,225,021 a. Calculate the NPV at the following discount rates and plot an NPV profile for this investment: 0%, 5%, 7.5%, 10%, 15%, 20%, 22.5%, 25%, 30%. b. What does the NPV profile tell you about this investment's IRR? c. If the company follows the IRR decision rule and their cost of...
Net present value. Lepton Industries has a project with the following projected cash flows: a. Using a discount rate of 10% for this project and the NPV model, determine whether the company should accept or reject this project. b. Should the company accept or reject it using a discount rate of 17%? c. Should the company accept or reject it using a discount rate of 20%? a. Using a discount rate of 10%, this project should be V. (Select from...
Net present value. Lepton Industries has a project with the following projected cash flows: 3: a. Using a discount rate of 12% for this project and the NPV model, determine whether the company should accept or reject this project. b. Should the company accept or reject it using a discount rate of 17%? c. Should the company accept or reject it using a discount rate of 22%? a. Using a discount rate of 12%, this project should be . (Select...
P9-8 (similar to) EQuestion Help Net present value. Lepton Industries has a project with the following projected cash flows: a. Using a discount rate of 9% for this project and the NPV model, determine whether the company should accept or reject this project b. Should the company accept or reject it using a discount rate of 17% ? c. Should the company accept or reject it using a discount rate of 20 %? . (Select from the drop-down menu.) a....
Most questions answered within 3 hours.
-
A local
electronic company primarily manufactures four highly technical
telecommunication products. Each product must be processed...
asked 45 minutes ago -
•Describe the basic structure of collagen monomers •Explain how
amino acid composition of collagen contributes to...
asked 2 hours ago -
Compute the sample correlation coefficient
r for each of the following data sets.
(Use 3 decimal...
asked 3 hours ago -
5a. What are the advantages and disadvantages of Proxy ARP?
b. What is the TTL field...
asked 2 hours ago -
An ice cube (density = 900[kg/m3]) with a side length of
2.54[cm] is held by a...
asked 4 hours ago -
would you say that leaders in the international context are born
or made? That is, can...
asked 4 hours ago -
Instructions
Read the Digital Trends article "Solid state drives are speedier
than hard disk drives. Are...
asked 4 hours ago -
A multiple-choice test consists of 29 questions with possible
answers of a, b, c, d. Estimate...
asked 5 hours ago -
Question 1: Ethanol is the active ingredient of alcoholic
beverages. It is also s a possible...
asked 5 hours ago -
In the process of a simple distillation, the substances in the
still head tube are in...
asked 5 hours ago -
In a normal distribution with mean 3 and standard deviation of
7, what are the upper...
asked 5 hours ago -
A big block stone with mass M explodes and splits in two pieces
with mass 0.40M...
asked 5 hours ago