a.
Payback period = 80,000/20,000 = 4 years
b.
NPV = $7,105.21
c.
PI = (NPV + Initial Investment)/Initial Investment
PI = 87,105.21/80,000 = 1.09
d.
IRR = 12.98%
2. You have recently won some money playing bingo and are in a dilemma of what...
2. You have recently won some money playing bingo and are in a dilemma of what you do with the money. Being the savvy finance person that you are, you decide to invest. You begin to are consider a project with an initial cash outlay of $80,000 and expected cash flows of $20,000 at the end of each year for 6 years. The required rate of return for each project is 10 percent. A) What is the projects payback period?...
you are considering a project with an initial cash outlay of $74,000 and expected cash flows of $23,680 at the end of each year for six years. the discount rate for the project is 9.7 percent. a. what are the project's payback discounted payback periods? - if the discount rate for this project is 9.7 percent, the discounted payback period of the project is how many years? b. what is the projects NPV? c. what is the project's PI? d....
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Your first assignment in your new position as assistant financial analyst at Caledonia Products is to evaluate two new capital-budgeting proposals. Because this is your first assignment, you have been asked not only to provide a recommendation but also to respond to a number of questions aimed at assessing your understanding of the capital-budgeting process. This is a standard procedure for all new financial analysts at Caledonia, and it will serve to determine whether you are moved directly into the...
udicates problems in Excel Study Problems All Study Problems are available in MyLab Finance. The X icon indicates problems Mylab format available in MyLab Finance. LO2 10-1. (Payback Period) What is the payback period for the following set of cash flowe YEAR CASH FLOWS --- $11,300 3,400 4,300 3,600 4,500 3,500 x 10-2. (IRR calculation) Determine the IRR on the following projects: a. An initial outlay of $10,000 resulting in a single free cash flow of $17,182 after 8 years...