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You are considering an investment opportunity that costs 900,000 today (t = 0) and will generate...
You are considering an investment opportunity that will generate a cash flow of $150,000 per year every year in perpetuity. The first cash-flow of $150,000 is one year from now (t = 1). How much are you willing to invest today (t = 0) if you want to have an internal rate of return (IRR) of 18%? Please show how to do without excel or calculator
You are considering opening a new plant. The plant will cost
$97.4 million upfront and will take one year to build. After that,
it is expected to produce profits of $28.5 million at the end of
every year of production. The cash flows are expected to last
forever. Calculate the NPV of this investment opportunity if your
cost of capital is 7.5%. Should you make the investment? Calculate
the IRR. Does the IRR rule agree with the NPV rule?
......
You are considering opening a new plant. The plant will cost S98.1 million upfront and will take one year to build. After that, it is expected to produce profits of $30.9 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 7.3%. Should you make the investment? Calculate the IRR. Does the IRR rule agree with the NPV rule? Here...
Question 3 (1 point) A firm is considering an investment project that costs $250,000 today and $250,000 in one year, but would produce benefits of $50,000 a year, starting in one year, forever. What is the NPV of this investment project if the firm applies an annual discount rate of 6.3% to all future cash flows? Your Answer: Answer Question 4 (1 point) Rockmont Recreation Inc. is considering a project that has the following cash flow and WACC (weighted average...
You are considering opening a new plant. The plant will cost $95.5 million upfront and will take one year to build. After that, it is expected to produce profits of $29.1 million at the end of every year of production. The cash flows are expected to last forever. Calculate the NPV of this investment opportunity if your cost of capital is 6.5%. Should you make the investment? Calculate the IRR. Does the IRR rule agree with the NPV rule? Here...
A company is considering a drug project that costs $1,650,000 today and is expected to generate end-of-year annual cash flows of $185,000, forever. At what discount rate would the company be indifferent between accepting or rejecting the project?
A firm is considering an investment project that costs $250,000 today and $250,000 in one year, but would produce benefits of $50,000 a year, starting in one year, forever. What is the NPV of this investment project if the firm applies an annual discount rate of 7.1% to all future cash flows?
A firm is considering making a one-time investment of $12.0
million, payable in full today. It is expected this would increase
the firm's free cash flows by $300,000 in one year, increasing by
3% each year thereafter, forever. So in two years, for example,
this investment will result in $309,000 more cash for the firm.
What is the IRR of this investment?
A firm is considering making a one-time investment of $12.0 million, payable in full today. It is expected...
You are considering an investment in a clothes distributer. The company needs $110,000 today and expects to repay you $121,000 in a year from now. What is the IRR of this investment opportunity? Given the riskiness of the investment opportunity, your cost of capital is 19%. What does the IRR rule say about whether you should invest? • What is the IRR of this investment opportunity? The IRR of this investment opportunity is %. (Round to one decimal place.) Given...
You have an investment opportunity that requires an initial investment of $8,000 today and will pay $7,500 in one year. What is the IRR of this opportunity?