Your company is considering two investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments will produce the following net cash flow: Year: Project A Project B
1 $5,000,000 $20,000,000
2 10,000,000 10,000,000
3 20,000,000 6,000,000
What are the two projects’ net present values, assuming the cost of capital is 10%?
Calculation of net present value of Project A; | ||||
Year | Cashflow(in$)(a) | PVF@10%(b) | Present value(a*b) | |
0 | -15000000 | 1.000 | -15000000.00 | |
1 | 5000000 | 0.909 | 4545454.55 | |
2 | 10000000 | 0.826 | 8264462.81 | |
3 | 20000000 | 0.751 | 15026296.02 | |
Net Present value(in $) | 12836213.37 | |||
Calculation of net present value of Project B; | ||||
Year | Cashflow(in$)(a) | PVF@10%(b) | Present value(a*b) | |
0 | -15000000 | 1.000 | -15000000.00 | |
1 | 20000000 | 0.909 | 18181818.18 | |
2 | 10000000 | 0.826 | 8264462.81 | |
3 | 6000000 | 0.751 | 4507888.81 | |
Net Present value(in $) | 15954169.80 |
Your company is considering two investment projects, each of which requires an up-front expenditure of $15...
Your division is considering two investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $ 5,000,000 $20,000,000 2 10,000,000 10,000,000 3 20,000,000 6,000,000 What are the two projects' net present values, assuming the cost of capital is 15%? Do not round intermediate calculations. Round your answers to the nearest dollar. Project A: $ Project B: $
Your division is considering two investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $5,000,000 $20,000,000 2 $10,000,000 $10,000,000 3 $20,000,000 $6,000,000 a. What are the two project’s net present values, assuming the cost of capital is 5%? 10%? 15% · 5%: · 10%: · 15% b. What are the two project’s IRR at these same costs of capital?
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of $19 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $ 5,000,000 $20,000,000 2 10,000,000 10,000,000 3 20,000,000 6,000,000 What are the two projects' net present values, assuming the cost of capital is 5%? Round your answers to the nearest dollar. Project A $ Project B $ What are the two projects' net present values,...
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of $19 million. You estimate that the investments will produce the following net cash flows: Project A Project B Year 1 $ 5,000,000 $20,000,000 Year 2 10,000,000 10,000,000 Year 3 20,000,000 7,000,000 What are the two projects' net present values, assuming the cost of capital is 5%? Round your answers to the nearest dollar. Project A $ Project B $ What are...
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of $17 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $ 5,000,000 $20,000,000 2 10,000,000 10,000,000 3 20,000,000 7,000,000 What are the two projects' net present values, assuming the cost of capital is 5%? Round your answers to the nearest dollar. Project A $ Project B $ What are the two projects' net present...
Your division is considering two investment projects, each of which requires an upfront expenditure of $15 million. You estimate that the investments will produce the following cash flows: Year Project A Project B 1 $5,000,000 $20,000,000 2 $10,000,000 $10,000,000 3 $20,000,000 $6,000,000 What is each project’s Net Present Value, assuming that your division’s cost of capital is 5%? 10%? 15%? (b) What is...
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of $17 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $ 4,000,000 $20,000,000 2 10,000,000 10,000,000 3 20,000,000 6,000,000 What are the two projects' net present values, assuming the cost of capital is 5%? Do not round intermediate calculations. Round your answers to the nearest dollar. Project A: $ Project B: $ What are the...
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of $17 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $ 6,000,000 $20,000,000 2 10,000,000 10,000,000 3 20,000,000 7,000,000 a. What are the two projects' net present values, assuming the cost of capital is 5%? Do not round intermediate calculations. Round your answers to the nearest dollar. Project A: $ Project B: $ What...
NPV Your division is considering two investment projects, each of which requires an up-front expenditure of $23 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $5,000,000 $20,000,000 2 10,000,000 10,000,000 3 20,000,000 8,000,000 a. What are the two projects' net present values, assuming the cost of capital is 5%? Do not round Intermediate calculations, Round your answers to the nearest dollar. Project A: $ 71565713 Project B: $ 12028615...
our division is considering two investment projects, each of which requires an up-front expenditure of $17 million. You estimate that the investments will produce the following net cash flows: Year Project A Project B 1 $ 5,000,000 $20,000,000 2 10,000,000 10,000,000 3 20,000,000 7,000,000 What are the two projects' net present values, assuming the cost of capital is 5%? Do not round intermediate calculations. Round your answers to the nearest dollar. Project A: $ Project B: $ What are the two...