Payback period is calculated as follows:
Year | Opening Balance | CF | Closing Balance |
0 | $ 3,50,000.00 | ||
1 | $ 3,50,000.00 | $ 80,000.00 | $ 2,70,000.00 |
2 | $ 2,70,000.00 | $ 50,000.00 | $ 2,20,000.00 |
3 | $ 2,20,000.00 | $ 50,000.00 | $ 1,70,000.00 |
4 | $ 1,70,000.00 | $ 50,000.00 | $ 1,20,000.00 |
5 | $ 1,20,000.00 | $ 45,000.00 | $ 75,000.00 |
6 | $ 75,000.00 | $ 45,000.00 | $ 30,000.00 |
7 | $ 30,000.00 | $ 45,000.00 | $ -15,000.00 |
8 | $ -15,000.00 | $ 45,000.00 | $ -60,000.00 |
A dry-bean harvester requires an initial cash outlay of $350,000. The after-tax net cash flows from...
You are considering an investment in a project that requires an initial outlay of $350,000 and will produce after-tax cash flows of $50,000 per year for the next 10 years. Your firm uses 40 percent debt and 60 percent equity in its financing. The after-tax costs of debt and equity are 6% and 11%, respectively. a. What is the firm’s WACC? b. What is the project NPV? Should the project be accepted?
Hogwarts Inc. is considering a project with the following cash flows: Initial cash outlay = $2,500,000 After–tax net operating cash flows for years 1 to 4 = $779,000 per year Additional after–tax terminal cash flow at the end of year 4 = $400,000 Compute the profitability index of this project if Hogwarts’ WACC is 11%.
Project L requires an initial outlay at t = 0 of $45,000, its expected cash inflows are $11,000 per year for 9 years, and its WACC is 8%. What is the project's discounted payback? Do not round intermediate calculations. Round your answer to two decimal places. (in years)
Hogwarts Inc. is considering a project with the following cash flows: Initial cash outlay = $2,500,000 After–tax net operating cash flows for years 1 to 4 = $779,000 per year Additional after–tax terminal cash flow at the end of year 4 = $400,000 Compute the profitability index of this project if Hogwarts’ WACC is 11%.
Project A Project B Initial cash outlay $180,000 $160,000 Annual depreciation $25,000 $20,000 Annual net cash inflow after tax $50,000 $40,000 Expected salvage value $0 $0 Projects A and B are to be evaluated using the payback period and the unadjusted rate of return. State which project should be accepted under each method.
Medium Size Mart, Inc. is considering a project with the following cash flows: Initial cash outlay = $2,100,000 After–tax net operating cash flows for years 1 to 3 = $775,000 per year Additional after–tax terminal cash flow at the end of year 3 = $700,000 Compute the profitability index of this project if Medium Mart’s WACC is 10%.
Project Ell requires an initial investment of $50,000 and the produces annual cash flows of $30,000, $25,000, and $15,000. Project Ess requires an initial investment of $60,000 and then produces annual cash flows of $25,000 per year for the next ten years. The company ranks projects by their payback periods.
You are considering a project with an initial cash outlay of $75,000 and expected cash flows of $21,750 at the end of each year for six years. The discount rate for this project is 9.7 percent. a. What are the project's payback and discounted payback periods? b. What is the project's NPV? c. What is the project's PI? d. What is the project's IRR?
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....
Project A requires an initial outlay at t = 0 of $1,000, and its cash flows are the same in Years 1 through 10. Its IRR is 15%, and its WACC is 8%. What is the project's MIRR? Do not round intermediate calculations. Round your answer to two decimal places. %