What is the IRR for the following project if its initial after-tax cost is $5,000,000 and...
What is the IRR for the following project if its initial after-tax cost is $5,000,000 and it is expected to provide an after-tax operating cash outflow of ($1,800,000) in year 1, followed by inflows of $2,900,000 in year 2, $2,700,000 in year 3, and $2,300,000 in year 4?
A) 5.83% B) 31.53% C) 11.44% D) 9.67%
Homework Answers
Calculating IRR using EXCEL FUNCTION:-
| Column-A | Column-B | |
| Row-1 | Year | Cash Flows of Project ($ ) |
| Row-2 | 0 | (5,000,000.00) |
| Row-3 | 1 | (1,800,000.00) |
| Row-4 | 2 | 2,900,000.00 |
| Row-5 | 3 | 2,700,000.00 |
| Row-6 | 4 | 2,300,000.00 |
| 5.83% | ||
| #=IRR(C2:C6) |
So, IRR is 5.83%
Option A
Add Answer to:
What is the IRR for the following project if its initial
after-tax cost is $5,000,000 and...
36 points. A project will have an initial after-tax cash outflow, lo, of $14.720. The hurdle...
36 points. A project will have an initial after-tax cash outflow, lo, of $14.720. The hurdle rate is 20 percent. The expected free cash inflows will be $4,000/year for years 3-8. a. Find the project's MIRR. b. Using "a", should the project be accepted? Why?
When might the IRR rule provide different guidance regarding project selection than the NPV rule? a)...
When might the IRR rule provide different guidance regarding
project selection than the NPV rule?
a) When a project has net expenditures (costs) that occur after
positive cash inflows.
b) When a project has two or more years of initial net
expenditures, followed only by cash inflows.
c) When a project has multiple IRRs.
d) When deciding between
mutually exclusive projects with different initial investment
amounts.
When might the IRR rule provide different guidance regarding project selection than the NPV...
Problem 10-02 IRR A project has an initial cost of $52,125, expected net cash inflows of...
Problem 10-02 IRR A project has an initial cost of $52,125, expected net cash inflows of $12,000 per year for 8 years, and a cost of capital of 9%. What is the project's IRR? Round your answer to two decimal places
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $58,850, and the project is expected to yield after-tax cash inflows of $6,000 per year for 15 years. The firm has a cost of capital of 14%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. C. Would you recommend that the firm accept or reject the...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $15,750, and the project is expected to yield after-tax cash inflows of $4,000 per year for 6 years. The firm has a cost of capital of 12%. a. Determine the net present value (NPV) for the project. b. Determine the intenal rate of retun (IRR) for the project. c. Would you recommend that the firm accept or reject the...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $30,160, and the project is expected to yield after-tax cash inflows of $4,000 per year for 12 years. The firm has a cost of capital of 15%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. c. Wauld you recommend that the firm accept or reject the...
o What is the NPV for a project is cost of capital is 15 percent and...
o What is the NPV for a project is cost of capital is 15 percent and its initial after-tax cost is $5.000,000 and it is expected to provide ater-tax cperating cash inflows of 51,380.000 in year 1.31.300.000 in year 2. 1.300.000 years and 513000 O A 53711 472 OB. $137053 OC. $1.200.28) OD. 51.100.000
Project M has an initial cost of $68,221, and its expected net cash inflows are $18,250...
Project M has an initial cost of $68,221, and its expected net cash inflows are $18,250 per year for 6 years. The firm has a WACC of 13 percent, and Project M’s risk would be similar to that of the firm’s existing assets. Calculate Project M’s internal rate of return (IRR). a. 8.21% b. 15.46% c. 13.00% d. 12.37% e. 60.51%
A project has an initial cost of $55,000, expected net cash inflows of $11,000 per year...
A project has an initial cost of $55,000, expected net cash inflows of $11,000 per year for 10 years, and a cost of capital of 9%. What is the project's IRR? A project has an initial cost of $62,025, expected net cash inflows of $13,000 per year for 12 years, and a cost of capital of 10%. What is the project's MIRR? A project has an initial cost of $51,225, expected net cash inflows of $11,000 per year for 8...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $24 comma 30024,300, and the project is expected to yield after-tax cash inflows of $3 comma 0003,000 per year for 1313 years. The firm has a cost of capital of 1212%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. c. Would you recommend that the firm...
36 points. A project will have an initial after-tax cash outflow, lo, of $14.720. The hurdle rate is 20 percent. The expected free cash inflows will be $4,000/year for years 3-8. a. Find the project's MIRR. b. Using "a", should the project be accepted? Why?
When might the IRR rule provide different guidance regarding
project selection than the NPV rule?
a) When a project has net expenditures (costs) that occur after
positive cash inflows.
b) When a project has two or more years of initial net
expenditures, followed only by cash inflows.
c) When a project has multiple IRRs.
d) When deciding between
mutually exclusive projects with different initial investment
amounts.
When might the IRR rule provide different guidance regarding project selection than the NPV...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $58,850, and the project is expected to yield after-tax cash inflows of $6,000 per year for 15 years. The firm has a cost of capital of 14%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. C. Would you recommend that the firm accept or reject the...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $15,750, and the project is expected to yield after-tax cash inflows of $4,000 per year for 6 years. The firm has a cost of capital of 12%. a. Determine the net present value (NPV) for the project. b. Determine the intenal rate of retun (IRR) for the project. c. Would you recommend that the firm accept or reject the...
NPV and IRR Benson Designs has prepared the following estimates for a long-term project it is considering. The initial investment is $30,160, and the project is expected to yield after-tax cash inflows of $4,000 per year for 12 years. The firm has a cost of capital of 15%. a. Determine the net present value (NPV) for the project. b. Determine the internal rate of return (IRR) for the project. c. Wauld you recommend that the firm accept or reject the...
o What is the NPV for a project is cost of capital is 15 percent and its initial after-tax cost is $5.000,000 and it is expected to provide ater-tax cperating cash inflows of 51,380.000 in year 1.31.300.000 in year 2. 1.300.000 years and 513000 O A 53711 472 OB. $137053 OC. $1.200.28) OD. 51.100.000
Most questions answered within 3 hours.
-
MATLAB
write a MATLAB function (1) output a third-order polynomial
function with the coefficients as the...
asked 1 minute from now -
A z-score
communicates a raw score’s "relative standing"
under the normal curve in relation to:
asked 6 minutes ago -
An object is vibrating on a spring with the following equation
of motion:
?=(30 ??)cos((2?)/(160)?)
a)...
asked 5 minutes ago -
Vulcan Flyovers offers scenic overflights of Mount St. Helens,
the volcano in Washington State that explosively...
asked 8 minutes ago -
If organizations do not adapt fast enough and move incrementally
from the twentieth-century model to the...
asked 9 minutes ago -
A helium balloon with 2.5L of gas has a gauge pressure of 10,000
Pa. The balloon...
asked 13 minutes ago -
What is responsible for Jupiter's enormous magnetic field?
asked 28 minutes ago -
At the end of the year, a company offered to buy 5,000 units of
a product...
asked 30 minutes ago -
Implement C++ program for each of the following.
Let D = [-48, -14, -8, 0, 1,...
asked 50 minutes ago -
Consider a labor market in which LD = 400 – 4W and LS = 250 +...
asked 1 hour ago -
Let’s say you are teaching a typically-developing young child
how to eat with a spoon. Describe...
asked 47 minutes ago -
Ask Your Teacher A toy gun uses a spring to project a 5.6-g soft
rubber sphere...
asked 59 minutes ago