John approached you with a business proposition to invest in a project. The Annual Cash Flows (CFt) are uncertain. However, the following probability distribution provides you with expectations: Probable Cash Flow (CF) Probability P(CF) $80,000 .25 $120,000 .65 $150,000 .10. What is the expected Annual Cash Flow from this project?
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) John approached you with a business proposition to invest in a project. The Annual Cash Flows (CFt) are uncertain. However, the following probability distribution provides you with expectations: Probable Cash Flow (CF) Probability P(CF) $80,000 .25 $120,000 .65 $150,000 .10 a. What is the expected Annual Cash Flow from this project? b. If the cash flows are expected for three years and the current rate of return on investments is 9.5%, what is the expected Present Value of the...
ABC Inc. is considering a project with following cash flow. Cash flow in parentheses denote negative flows: Year Cash Flow (200,000) 120,000 120,000 ? 120,000 K is 10 percent.The project’s modified internal rate of return (MIRR) is 16.38%. What is the expected cash flow in year 3? What is NPV of proeject?
Relevant cash flow and timeline depiction For each of the following projects, determine the relevant cash flows, and depict the cash flows on a time line. a. A project that requires an initial investment of $120,000 and will generate annual operating cash inflows of $29,000 for the next 20 years. In each of the 20 years, maintenance of the project will require a $5,000 cash outflow. b. A new machine with an installed cost of $82,000. Sale of the old...
What is the Net Present Value of the following cash flows which
represent expected benefits from opening a small ice cream business
part time. You are expecting a return of 20%, and you must invest
$60,000 at the start. Fill in the chart below. Determine the IRR
using Excel. Interpret the results in view of your expectations for
this project.
PV Year | Cash Flow T 1 5,000 9,000 10,000 10,000 12,000 14,000 7 101,500 Present Value NPV (Est IRR)...
Consider the probability distribution of the first year cash flows for the DEF Project: Project Cash Flow Probability $1,000 20% $2,000 60% $3,000 20% Please show all work, step by step, for a thumbs up! Thanks!! Calculate the range of possible cash flows Calculate the expected cash flow Calculate the standard deviation of the possible cash flows Calculate the coefficient of variation of the possible cash flows
Chapter 4 MindTap To find the present value of a cash flow expected to be paid or received in the future, you will the future value cash flow by (1 + r)". What is the value today of a $12,000 cash flow expected to be received eight years from now based on an annual interest rate of 6%? $6,023 O $7,529 O $19,126 O $11,670 Your broker called earlier today and offered you the opportunity to invest in a security....
Project LMK requires an initial outlay of $400,000 and has a profitability index of 1.5. The project is expected to generate equal annual cash flows over the next twelve years. The required return for this project is 20%. What is project LMK's net present value? A. $600,000 B. $80,000 C. $120,000 D. $150,000 i found the same solution but the different answers so please can you check it for me
Given a project with the following cash flows and a cost of capital of 9%. Calculate the NPV, IRR, MIRR, and PI. For each of the four calculations, give a brief interpretation of what it measures and how it should be used to evaluate a project. Should the project be accepted? Why or why not? Time Period Cash Flow 0 -$200,000 1 $50,000 2 $70,000 3 -$80,000 4 $75,000 5 $100,000 6 $120,000...
A new project has expected annual net cash flows of $160,000 with a standard deviation of $480,000. The distribution of annual net cash flows is approximately normal. Use Table V to answer the questions. Round your answers to two decimal places. What is the probability of the project having negative annual net cash flows? % What is the probability that annual net cash flows will be greater than $310,000? %
Xander Inc. has prepared the following sensitivity analysis: Estimated Annual Net Cash Flow $500,000 $600,000 $700,000 Present value of annual net cash flows (× 4.487) $2,243,500 $2,692,200 $3,140,900 Present value of residual value 50,000 50,000 50,000 Total present value $2,293,500 $2,742,200 $3,190,900 Amount to be invested (3,000,000) (3,000,000) (3,000,000) Net present value (706,500) (257,800) 190,900 In addition, it has assigned the following likelihoods to the three possible annual net cash flows: $500,000, 70%; $600,000, 20%; and $700,000, 10%. Based on...