Homework Answers
Present value of inflows=cash inflow*Present value of discounting factor(rate%,time period)
=1500/1.09+1500/1.09^2+9000/1.09^3
=9588.32
NPV=Present value of inflows-Present value of outflows
=9588.32-9500
=$88.32(Approx)
Hence the correct option is:
Between $0 and $400
Add Answer to:
Sergio is the CFO of Garcia Industries Inc. Gll is considering a project with an initial...
A. $239,209 B. -$249,335 C. -$138,561 D. $725,000 Southeast Compositions, Inc. is considering a project with...
A. $239,209
B. -$249,335
C. -$138,561
D. $725,000
Southeast Compositions, Inc. is considering a project with the following cash flows: Initial Outlay- $126,000 Cash Flows: Year 1 = $44,000 Year 2 $59,000 Year 3 = $64,000 Compute the net present value of this project if the company's discount rate is 14%
Free Spirit Industries Inc. is considering investing $500,000 in a project that is expected to generate...
Free Spirit Industries Inc. is considering investing $500,000 in a project that is expected to generate the following net cash flows: Free Spirituses a WACC of 9% when evaluating proposed capital budgeting projects. Based on these cash flows, determine this project's PI (rounded to four decimal places): Year Cash Flow Year 1 $325,000 Year 2 $425,000 Year 3 $400,000 Year 4 $450,000 O 2.1820 O 2.6955 O 2.5671 O 2.3104 Free Spirit's decision to accept or reject this project is...
Irwin Industries is currently considering a project that will produce cash inflows of $8,000 a year...
Irwin Industries is currently considering a project that will produce cash inflows of $8,000 a year for two years followed by $6,500 a year for three more years. The cost of the project is $26,000. What is the profitability index if the discount rate is 8%?
Cold Goose Metal Works Inc. is analyzing a project that requires an initial investment of $500,000....
Cold Goose Metal Works Inc. is analyzing a project that requires an initial investment of $500,000. The project's expected cash flows are: Year Year 1 Year 2 Year 3 Year 4 Cash Flow $300,000 -175,000 475,000 425,000 Cold Goose Metal Works Inc.'s WACC is 9%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): O 19.75% 22.71% 17.78% O 23.70% this If Cold Goose Metal Works Inc.'s managers...
1. Firm A is considering a project that will require $28,000 in initial working capital and...
1. Firm A is considering a project that will require $28,000 in initial working capital and $87,000 in fixed assets. The project is expected to produce annual sales of $75,000 with associated cash costs of $57,000. The project has a 5-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 30 %. What is the operating cash flow for this project? A.-$1,520 B.-$580 C. $420 E.$17,820 D.$15,680 2....
1. Sanders Inc., is considering a project with the following cash flows. Year Cash Flows 0...
1. Sanders Inc., is considering a project with the following cash flows. Year Cash Flows 0 -$50,000 1 $10,659 2 $15,437 3 $45,103 4 $75,074 5 $250,682 What is the regular payback period for this project? [Enter the final answer in as a decimal (e.g. 5.55) - not a percent] 2. Sanders Inc., is considering a project with the following cash flows. Year Cash Flows 0 -$50,000 1 $10,988 2 $15,644 3 $20,216 4 $40,031 5 $133,490 What is the...
2. The management of Leitheiser Corporation is considering a project that would require an initial investment...
2.
The management of Leitheiser Corporation is considering a project that would require an initial investment of $44,000. No other cash outflows would be required. The present value of the cash inflows would be $59,330. The profitability index of the project is closest to (lgnore income taxes.) A project requires an initial investment of $63,000 and has a project profitability index of 0.332. The present value of the future cash inflows from this investment is: Trovato Corporation is considering a...
8. Abandonment options Galbraith Co. is considering a four-year project that will require an initial investment...
8. Abandonment options Galbraith Co. is considering a four-year project that will require an initial investment of $15,000. The base-case cash flows for this project are projected to be $15,000 per year. The best-case cash flows are projected to be $22,000 per year, and the worst-case cash flows are projected to be -$1,500 per year. The company's analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that...
Albert Co. is considering a four-year project that will require an initial investment of $5,000. The...
Albert Co. is considering a four-year project that will require an initial investment of $5,000. The base-case cash flows for this project are projected to be $15,000 per year. The best-case cash flows are projected to be $22,000 per year, and the worst-case cash flows are projected to be -$1,500 per year. The company's analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that there is a...
Heinlein Inc is considering investing in a project with a cost of $100k. The project is...
Heinlein Inc is considering investing in a project with a cost of $100k. The project is expected to produce cash flows of $50 in year 1, 75 in year 2, and 175 in year 3. If the discount rate is 0.07 what is the discounted payback period. .50 1.75 1.81
A. $239,209
B. -$249,335
C. -$138,561
D. $725,000
Southeast Compositions, Inc. is considering a project with the following cash flows: Initial Outlay- $126,000 Cash Flows: Year 1 = $44,000 Year 2 $59,000 Year 3 = $64,000 Compute the net present value of this project if the company's discount rate is 14%
Free Spirit Industries Inc. is considering investing $500,000 in a project that is expected to generate the following net cash flows: Free Spirituses a WACC of 9% when evaluating proposed capital budgeting projects. Based on these cash flows, determine this project's PI (rounded to four decimal places): Year Cash Flow Year 1 $325,000 Year 2 $425,000 Year 3 $400,000 Year 4 $450,000 O 2.1820 O 2.6955 O 2.5671 O 2.3104 Free Spirit's decision to accept or reject this project is...
Cold Goose Metal Works Inc. is analyzing a project that requires an initial investment of $500,000. The project's expected cash flows are: Year Year 1 Year 2 Year 3 Year 4 Cash Flow $300,000 -175,000 475,000 425,000 Cold Goose Metal Works Inc.'s WACC is 9%, and the project has the same risk as the firm's average project. Calculate this project's modified internal rate of return (MIRR): O 19.75% 22.71% 17.78% O 23.70% this If Cold Goose Metal Works Inc.'s managers...
1. Firm A is considering a project that will require $28,000 in initial working capital and $87,000 in fixed assets. The project is expected to produce annual sales of $75,000 with associated cash costs of $57,000. The project has a 5-year life. The company uses straight-line depreciation to a zero book value over the life of the project. The tax rate is 30 %. What is the operating cash flow for this project? A.-$1,520 B.-$580 C. $420 E.$17,820 D.$15,680 2....
2.
The management of Leitheiser Corporation is considering a project that would require an initial investment of $44,000. No other cash outflows would be required. The present value of the cash inflows would be $59,330. The profitability index of the project is closest to (lgnore income taxes.) A project requires an initial investment of $63,000 and has a project profitability index of 0.332. The present value of the future cash inflows from this investment is: Trovato Corporation is considering a...
8. Abandonment options Galbraith Co. is considering a four-year project that will require an initial investment of $15,000. The base-case cash flows for this project are projected to be $15,000 per year. The best-case cash flows are projected to be $22,000 per year, and the worst-case cash flows are projected to be -$1,500 per year. The company's analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that...
Albert Co. is considering a four-year project that will require an initial investment of $5,000. The base-case cash flows for this project are projected to be $15,000 per year. The best-case cash flows are projected to be $22,000 per year, and the worst-case cash flows are projected to be -$1,500 per year. The company's analysts have estimated that there is a 50% probability that the project will generate the base-case cash flows. The analysts also think that there is a...
Most questions answered within 3 hours.
-
Explain some different types of fungi. State the different
divisions undergo by fungi.
asked 11 minutes ago -
The shortest time that 120 C can flow through a 20 A circuit
breaker without tripping...
asked 11 minutes ago -
A software design pattern is a general, reusable solution to a
commonly occurring problem, acting as...
asked 14 minutes ago -
The mean waiting time at the drive-through of a fast-food
restaurant from the time an order...
asked 31 minutes ago -
The pitch (p) of a helix is defined as p = dn, in which n is...
asked 32 minutes ago -
Do you agree that the declining stock of social capital is the
blame for the failure...
asked 36 minutes ago -
A researcher is interested in whether coffee consumption helps
with performance on reading comprehension tasks. The...
asked 46 minutes ago -
it has been estimated since the beginning of the human race that
about 133 metric ton...
asked 51 minutes ago -
Where must Medicare prescription drug plans allow for
participants to fill their prescriptions?
asked 55 minutes ago -
Five moles of monatomic ideal gas have initial pressure 2.50 ×
103 Pa and initial volume...
asked 1 hour ago -
A resistor and the capacitor are used to control the timing in
the RC circuit of...
asked 1 hour ago -
Living in a group could bring several disadvantages to an
individual. What are some of the...
asked 1 hour ago