1. Project B has following cashflows at years 0 and 1 respectively: $ -4225 and $...
1. Project B has following cashflows at years 0 and 1 respectively: $ -4225 and $ 6302. What is the Internal Rate of Return (IRR) of this project?
2. Assume Fox Inc. has a P/E ratio of 22.5 and a stock price of $ 37.5. Calculate earnings per share of the company.
Homework Answers
1)
IRR is the rate of return that makes initial investment equal to present value of cash inflows
Initial investment = FV / (1 + r)^n
4225 = 6302 / (1 + r)^1
(1 + r)^1 = 1.491598
1+ r = 1.491598
r = 0.4916 or 49.16%
IRR is 49.16%
2)
P/E ratio = Price / EPS
22.5 = 37.5 / EPS
EPS = 1.67
Add Answer to:
1. Project B has following cashflows at years 0 and 1
respectively: $ -4225 and $...
A project has the following cash inflows $40,000; $60,500; $70,000; and $48,800 for years 1 through...
A project has the following cash inflows $40,000; $60,500; $70,000; and $48,800 for years 1 through 4, respectively. The initial cash outflow is $184,000. Which of the following four statements is correct concerning the project internal rate of return (IRR)? Select one: a. The IRR is less than 10% b. The IRR is greater than or equal to 10%, but less than 14%. Incorrect c. The IRR is greater than or equal to 14%, but less than 18%. d. The...
Moepro, Inc. is considering a five - year project that has an initial outlay or cost...
Moepro, Inc. is considering a five - year project that has an
initial outlay or cost of $120,000. The respective future
cashinflows from its projects for years 1, 2, 3, 4, and 5 are:
$55,000, $45,000, $35,000, $25,000, and $15,000. Moepro uses the
internal rate of return method to evaluate projects. What is the
projects IRR?
The IRR is over 25.50%
The IRR is about 19.16%
The IRR is less than 22.5%
The IRR is about 17.86%
Moepro Inc. is.coming...
A project has cash flows of -$148,400, $42,500, $82,300, and $46,200 for Years 0 to 3,...
A project has cash flows of -$148,400, $42,500, $82,300, and $46,200 for Years 0 to 3, respectively. The required rate of return is 10 percent. Based on the internal rate of return of the project percent for this project, you should Multiple Choice 7.48; reject 7.48; accept 7.91; accept 8.03; accept 8.03; reject
A project has cash flows of -$148,400, $42,500, $82,300, and $46,200 for Years 0 to 3, respectively. The required rate of return is 10 percent. Based on...
*assume after tax and DTS* Retro Inc. has 1,100 bonds outstanding that are selling for $992...
*assume after tax and DTS* Retro Inc. has 1,100 bonds outstanding that are selling for $992 each. The bonds carry a 6.0 percent coupon, pay interest semi-annually, and mature in 7.5 years. The company also has 9,500 shares of 5% preferred stock at a market price of $40 per share. This month, the company paid an annual dividend in the amount of $1.20 per share. The dividend growth rate is 5.0 percent. The common stock is priced at $30 a...
ABC's WACC is 10% and there are 2 projects available. Project Large has the following expected...
ABC's WACC is 10% and there are 2 projects available. Project Large has the following expected cashflows at time 0, 1, 2, 3 and 4 respectively: $-1000, $500, $400, $300 and $75. Project Small has the following expected cashflows at time 0, 1, and 2 respectively: $-80, $500, $-495. Assume the projects are mutually exclusive and your criteria to choose a project is based on IRR. Based on your decision, what is the profitable NPV, to the nearest cents, of...
A project has the following cash following cash flows for years zero through 3, respectively: -$3,500,...
A project has the following cash following cash flows for years zero through 3, respectively: -$3,500, $900, $1,800, $1,500. Is 10% the IRR for this project? A. No, the IRR is below 10% B. Yes, the IRR is 10% C. No, the IRR is above 10%
A project has cash flows of −$152,000, $60,800, $62,300, and $75,000 for Years 0 to 3,...
A project has cash flows of −$152,000, $60,800, $62,300, and $75,000 for Years 0 to 3, respectively. The required rate of return is 13 percent. Based on the internal rate of return of _____ percent, you should _____ the project. Please give an exact answer.
8) Project A has an internal rate of return (IRR) of 15 percent. Project B has...
8) Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a required retum of 12 percent. Which of the following statements is MOST correct? A) Project A must have a higher NPV than Project B. B) Both projects have a positive net present value (NPV) C) Project B has a higher profitability index than Project A. D) If the required return were less than 12 percent,...
Sail Inc. is considering a new project. The equipment costs $42M, will be depreciated on a...
Sail Inc. is considering a new project. The equipment costs $42M, will be depreciated on a straight-line basis over 3 years to a zero book value and can be sold for 5M at the end of 3 years. It will generate earnings before interest and taxes (EBIT) of 6M per year for 3 years. There is no net working capital expenditure. The tax rate is 25%. Sail has a target debt ratio (D/V) of 40% debt and the rest from...
A project has cash flows of –$148,400, $42,500, $87,300, and $43,200 for Years 0 to 3,...
A project has cash flows of –$148,400, $42,500, $87,300, and $43,200 for Years 0 to 3, respectively. The required rate of return is 11 percent. Based on the internal rate of return of ________ percent for this project, you should ________ the project. A.) 7.91; reject B.) 8.03; reject C.) 6.67; reject D.) 8.03; accept E.) 7.91; accept
Moepro, Inc. is considering a five - year project that has an
initial outlay or cost of $120,000. The respective future
cashinflows from its projects for years 1, 2, 3, 4, and 5 are:
$55,000, $45,000, $35,000, $25,000, and $15,000. Moepro uses the
internal rate of return method to evaluate projects. What is the
projects IRR?
The IRR is over 25.50%
The IRR is about 19.16%
The IRR is less than 22.5%
The IRR is about 17.86%
Moepro Inc. is.coming...
A project has cash flows of -$148,400, $42,500, $82,300, and $46,200 for Years 0 to 3, respectively. The required rate of return is 10 percent. Based on the internal rate of return of the project percent for this project, you should Multiple Choice 7.48; reject 7.48; accept 7.91; accept 8.03; accept 8.03; reject
A project has cash flows of -$148,400, $42,500, $82,300, and $46,200 for Years 0 to 3, respectively. The required rate of return is 10 percent. Based on...
8) Project A has an internal rate of return (IRR) of 15 percent. Project B has an IRR of 14 percent. Both projects have a required retum of 12 percent. Which of the following statements is MOST correct? A) Project A must have a higher NPV than Project B. B) Both projects have a positive net present value (NPV) C) Project B has a higher profitability index than Project A. D) If the required return were less than 12 percent,...
Most questions answered within 3 hours.
-
In your groups, list the international actors you would expect
to encounter in an emergency logistics...
asked 15 minutes ago -
When one molecule of methane combusts with oxygen, 5.74 X
10-21 J is released as heat....
asked 37 minutes ago -
Required information
[The following information applies to the questions
displayed below.]
Satellite Systems modified its model...
asked 31 minutes ago -
High Normal blood pressure is categorized as which of
the following?
140-159/90-99
120/80
130-139/85-89
160/100
asked 40 minutes ago -
Please I need help with MATLAB .. PLease help me . Thankyou
Write Matlab code to...
asked 38 minutes ago -
You are saving towards purchasing a house and currently have
$20,000 in an account that earns...
asked 48 minutes ago -
Draw three resonance structures for each of
the following:
(a) -CH2NO2 (b) CH3CO2CH3
(c) -CH2CO2- (d)...
asked 55 minutes ago -
There has been discussion about people moving from Earth to Mars
in the future. An organization...
asked 54 minutes ago -
Starting Out with c++ Student Line Up Using Files A teacher has
asked all her students...
asked 56 minutes ago -
Two point charges totaling 9.00 µC exert a repulsive force of
0.200 N on one another...
asked 57 minutes ago -
In Visual Studio 2017
Populate a two-dimensional array with the following prices in
this table order:...
asked 1 hour ago -
Answer below in detail
1. Reverse Logistics - Introduction
2. The world before and after reverse...
asked 1 hour ago