Homework Answers
| Year | Cash flow |
| 0 | -75000 |
| 1 | 9000 |
| 2 | 9000 |
| 3 | 9000 |
| 4 | 9000 |
| 5 | 9000 |
| 6 | 9000 |
| 7 | 9000 |
| 8 | 9000 |
| 9 | 9000 |
| 10 | 9000 |
| 11 | 9000 |
| 12 | 9000 |
| 13 | 9000 |
| 14 | 9000 |
| 15 | 9000 |
| 8.44% |
Using Excel's IRR function
option(A)
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Firm invests $75,000 to save $9000/year in energy costs for 15 years. What is project's rate...
23. You require a 14 percent rate of return from an investment. The investment costs $58,000...
23. You require a 14 percent rate of return from an investment. The investment costs $58,000 and will produce cash inflows of $25,000 for 3 years. Should you accept this project based on its internal rate of return? Why or why not? A. No; because the IRR is 14.04 percent B. Yes; because the IRR is 14.65 percent C. Yes; because the IRR is 14.67 percent D. No; because the IRR is 13.04 percent E. None of the above 24....
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....
13,14,15 313750 PV Costs 15 years Machine A Machine B $75,500 are the same functions, have...
13,14,15
313750 PV Costs 15 years Machine A Machine B $75,500 are the same functions, have The machines, A and, which Bowing costs and lives Life $105,000 8 years DOO Ir the cost of capital were 250, which machine would you chooser 2. Machine A because the EAC(equivalent annual cost) is $27.20 527,207.27. Machine because the EAC equivalent annual cost) is $9346.50. Machine A because the EAC equivalent annual cost) is $7000.00. d. Machine B because the EAC equivalent annual...
Directions: Choose the best answer. (Keep 4 decimals unless told otherwise.) If Hannah invests $1,800 in...
Directions: Choose the best answer. (Keep 4 decimals unless told otherwise.) If Hannah invests $1,800 in a mutual fund today and it carns 6 percent per year for 45 years, how much will she have? a. $57,457 b. $24,776 c. $16,461 d. $6,807 e. $47,599 Interest rates on 6-year Treasury securities are currently 4%, while 8-year Treasury securities yield 4.3%. If the pure expectations theory is correct, what does the market believe that 2-year Treasury securities will be yielding 6...
ost will be incurred. The 14 If the sold? a. $1,600,000 b. $0, the firm still...
ost will be incurred. The 14 If the sold? a. $1,600,000 b. $0, the firm still has some retained earnings to irthe company ends up spending $2 million of new capital, how much new common stock must be $410,000 $200,000 e. $250,000 15 15 1s Calculate WACC2 in the MCC schedule a. 14.16 percent b. 13.30 percent e. 13.88 percent d. 14.92 percent e. None of the above. P (1F 2008 15 The table million shares outstanding, the firm's common...
Question 15 10 points Save Answer Master Manufacturing is considering the purchase of a machine for $500,000. Alternatively, the machine could be leased on a five-year contract for $125,000 per year...
Question 15 10 points Save Answer Master Manufacturing is considering the purchase of a machine for $500,000. Alternatively, the machine could be leased on a five-year contract for $125,000 per year with lease payments made at the beginning of each year. I the company purchases the machine, maintenance costs will be $25,000 per year and the salvage value of the machine after five years is expected to be $70,000. Answer the below questions using an interest rate of 10% per...
a) Let's say a year of college currently costs $20,000 in today's dollars. If your clients' child is currently 9 years o...
a) Let's say a year of college currently costs $20,000 in today's dollars. If your clients' child is currently 9 years old and will start college at 18 years of age, how much will the first year of college cost? Assume college expenses inflate at 3.4% per year, and you can earn an annual rate of return of 6.9% on your investments. b) Let's say that when your clients' child starts college, you estimate that annual tuition will be about...
Jefferson Labs, a nonprofit organization, estimates that it can save $26,000 a year iN cash operating costs for the nex...
Jefferson Labs, a nonprofit organization, estimates that it can save $26,000 a year iN cash operating costs for the next 9 years if it buys a special-purpose eye-testing machine at a cost of $125,000. No terminal disposal value is expected. Jefferson Labs' required rate of return is 12%. Assume all cash flows occur at year-end except for initial investment amounts. Jefferson Labs uses straight-line depreciation. Present Value of $1 table Present Value of Annuity of $1 table Future Value of...
Question Help O Chicago Hospital, a nonprofit organization, estimates that it can save $25,000 a year...
Question Help O Chicago Hospital, a nonprofit organization, estimates that it can save $25,000 a year in cash operating costs for the next 9 years if it buys a special-purpose eye-testing machine at a cost of $100,000. No terminal disposal value is expected. Chicago Hospital's required rate of return is 14%. Assume all cash flows occur at year-end except for initial investment amounts. Chicago Hospital uses straight-line depreciation. Present Value of $1 table Present Value of Annuity of $1 table...
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....
13,14,15
313750 PV Costs 15 years Machine A Machine B $75,500 are the same functions, have The machines, A and, which Bowing costs and lives Life $105,000 8 years DOO Ir the cost of capital were 250, which machine would you chooser 2. Machine A because the EAC(equivalent annual cost) is $27.20 527,207.27. Machine because the EAC equivalent annual cost) is $9346.50. Machine A because the EAC equivalent annual cost) is $7000.00. d. Machine B because the EAC equivalent annual...
Directions: Choose the best answer. (Keep 4 decimals unless told otherwise.) If Hannah invests $1,800 in a mutual fund today and it carns 6 percent per year for 45 years, how much will she have? a. $57,457 b. $24,776 c. $16,461 d. $6,807 e. $47,599 Interest rates on 6-year Treasury securities are currently 4%, while 8-year Treasury securities yield 4.3%. If the pure expectations theory is correct, what does the market believe that 2-year Treasury securities will be yielding 6...
ost will be incurred. The 14 If the sold? a. $1,600,000 b. $0, the firm still has some retained earnings to irthe company ends up spending $2 million of new capital, how much new common stock must be $410,000 $200,000 e. $250,000 15 15 1s Calculate WACC2 in the MCC schedule a. 14.16 percent b. 13.30 percent e. 13.88 percent d. 14.92 percent e. None of the above. P (1F 2008 15 The table million shares outstanding, the firm's common...
Question 15 10 points Save Answer Master Manufacturing is considering the purchase of a machine for $500,000. Alternatively, the machine could be leased on a five-year contract for $125,000 per year with lease payments made at the beginning of each year. I the company purchases the machine, maintenance costs will be $25,000 per year and the salvage value of the machine after five years is expected to be $70,000. Answer the below questions using an interest rate of 10% per...
Jefferson Labs, a nonprofit organization, estimates that it can save $26,000 a year iN cash operating costs for the next 9 years if it buys a special-purpose eye-testing machine at a cost of $125,000. No terminal disposal value is expected. Jefferson Labs' required rate of return is 12%. Assume all cash flows occur at year-end except for initial investment amounts. Jefferson Labs uses straight-line depreciation. Present Value of $1 table Present Value of Annuity of $1 table Future Value of...
Question Help O Chicago Hospital, a nonprofit organization, estimates that it can save $25,000 a year in cash operating costs for the next 9 years if it buys a special-purpose eye-testing machine at a cost of $100,000. No terminal disposal value is expected. Chicago Hospital's required rate of return is 14%. Assume all cash flows occur at year-end except for initial investment amounts. Chicago Hospital uses straight-line depreciation. Present Value of $1 table Present Value of Annuity of $1 table...
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