ZuoTi.Pro
Question

Davis Chili Company is considering an investment of $48,000, which produces the following inflows: Year Cash Flow 1 $21,000 2
a. Determine the net present value of the project based on a zero percent discount rate. Net present value b. Determine the n
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
a] NPV = -48000+21000+20000+17000 = $           10,000
b] NPV = -48000+21000/1.09+20000/1.09^2+17000/1.09^3 = $        1,226.77
c] NPV = -48000+21000/1.20+20000/1.20^2+17000/1.20^3 = $       -6,773.15
0 0
Add a comment
Know the answer?
Add Answer to:
Davis Chili Company is considering an investment of $48,000, which produces the following inflows: Year Cash...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Davis Chili Company is considering an investment of $50,000, which produces the following inflows: Year Cash...

    Davis Chili Company is considering an investment of $50,000, which produces the following inflows: Year Cash Flow 1 $ 22,000 2 21,000 3 18,000 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. A. Determine the net present value of the project based on a zero percent discount rate. B. Determine the net present value of the project based on a 10 percent discount rate. (Do not round intermediate calculations...

  • MATS Company is considering an investment of $35,000, which produces the following inflows: Year                          &n

    MATS Company is considering an investment of $35,000, which produces the following inflows: Year                                                                                       Cash Flow 1 .....................                                                                 $16,000 2 .....................                                                                  15,000 3 .....................                                                                  12,000 a. Determine the net present value of the project based on 8% discount rate. b. Determine the net present value of the project based on a 10% discount rate. c. Determine the net present value of the project based on a 15% discount rate d. Calculate IRR Include financial calculator steps, including the keys pressed on the calculator to...

  • Consider the following cash flows:    Year Cash Flow 0 –$ 34,000 1 15,100 2 16,600...

    Consider the following cash flows:    Year Cash Flow 0 –$ 34,000 1 15,100 2 16,600 3 12,500 What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)    Net present value            $    What is the NPV at a discount rate of 8 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)    Net present...

  • Consider the following cash flows: Year Cash Flow 332,500 13,800 17,900 11,200 WN a. What is...

    Consider the following cash flows: Year Cash Flow 332,500 13,800 17,900 11,200 WN a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 21 percent?...

  • Wilkinson Co. has identified an investment project with the following cash flows:      Year Cash Flow...

    Wilkinson Co. has identified an investment project with the following cash flows:      Year Cash Flow 1 $ 730 2 950 3 1,210 4 1,300    If the discount rate is 8 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)      Present value $    If the discount rate is 18 percent, what is the present value of these cash flows? (Do not round...

  • Consider the following cash flows: Year 0 WN - 0 Cash Flow 33,000 14,900 16,800 12,300...

    Consider the following cash flows: Year 0 WN - 0 Cash Flow 33,000 14,900 16,800 12,300 a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 12 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate...

  • Consider the following cash flows: Year points o-NM Cash Flow 19,400 10,400 9,320 6,900 ( 8...

    Consider the following cash flows: Year points o-NM Cash Flow 19,400 10,400 9,320 6,900 ( 8 00:23:43 eBook a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the NPV at a discount rate of 10 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount...

  • A project has the following cash flows: Year Cash Flow 0 $ 66,500 1 –41,000 2...

    A project has the following cash flows: Year Cash Flow 0 $ 66,500 1 –41,000 2 –32,800 What is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return             % What is the NPV of this project if the required return is 4 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your...

  • Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment....

    Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects. The investment and cash flow patterns are as follows: Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Project E Project H ($47,000 Investment) ($38,000 Investment) Year Cash Flow Year Cash Flow...

  • Consider the following cash flows: Year Cash Flow 32,500 13,800 17,900 11.200 دبہ بن a. What...

    Consider the following cash flows: Year Cash Flow 32,500 13,800 17,900 11.200 دبہ بن a. What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. What is the NPV at a discount rate of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. What is the NPV at a discount rate of 21...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT