Homework Answers
Answers
a)Filled table is shown below
b) NPV at 5% discount rate is 44.311
c)Overall NPV of the project at 10% discount rate is 29.367
a)
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Problem 2 (15 pts): Given the cash flow described in the table below Year 0 Year...
3. Consider Table 2 Table 2 Year 3 Year 4 Cash flow Year 2 Year 0 Year 1 Cash flovw Cash flow Cash flow 70 Cash flow Pr...
3. Consider Table 2 Table 2 Year 3 Year 4 Cash flow Year 2 Year 0 Year 1 Cash flovw Cash flow Cash flow 70 Cash flow Project 80 70 30 -150 0.24 Interest Tax Shield 0.75 (a)Consider Table 2. Calculate the net present value of the project assuming it is all-equity financed. The required return on unlevered equity is 15%. (b)Consider Table 2. Assume for now that the project is financed using equal parts debt and equity. The cost...
Given the cash flow described in table below. Determine the ROR. Given the cash flow described...
Given the cash flow described in table below. Determine the
ROR.
Given the cash flow described in table below. Determine the ROR. Year 0 1-2 3-5 6-10 Cash flow -15,000 4,000 3,000 1,500 20% 18% 15% 13%
14. The following table shows the cash flow for the costs of the Self Performing Contractor...
14. The following table shows the cash flow for the costs of the Self Performing Contractor and estimates for revenues from a residential project. (in x1000 TL) a) Calculate the Net Cash Flow and the Cumulative Cash Flow for the project (2 points) b) What is the payback period for the project? (2 points) c) What is the Net Present Value (NPV) of the project to the Self Performing Contractor, if the discount rate is i=7% (3 points). d) Would...
A five-year project has a projected net cash flow of $17,000 in year 1, $25,000 in...
A five-year project has a projected net cash flow of $17,000 in year 1, $25,000 in year 2, $27,000 in year 3, $20,000 in year 4, and $15,000 in year 5. It will cost $60,000 to implement the project. If the required rate of return is 23 percent, conduct a discounted cash flow calculation to determine the NPV. 1) the NPV for the project is ____
2. A certain project has a duration of 7 years with the Outbound cash flow reported...
2. A certain project has a duration of 7 years with the Outbound cash flow reported in Table 1. Two alternative terms of payment are reported in Table 2 and 3. The currency is Millions of Dollars. The discount rate (or WACC) is 10% TABLE 1 Year Outbound cash flow 0 10 1 20 2 20 3 50 4 70 5 50 6 20 7 10 TABLE 2-CASE A Year Inbound cash flow 0 20 4 30 5 30 6...
A project has expected cash flows as shown below: Year Net Cash Flow 0 -25,000 1-4...
A project has expected cash flows as shown below: Year Net Cash Flow 0 -25,000 1-4 5,000 5-7 4,000 8 8,000 9 7,000 If the firm's discount rate is 12 percent, what is the NPV of this project?
software company is evaluating the following projects with estimated cash flow (in $): Year (t) Project...
software company is evaluating the following projects with estimated cash flow (in $): Year (t) Project A Project B Project C 0 -100,000 -100,000 -120,000 1 30,000 30,000 40,000 2 40,000 30,000 40,000 3 40,000 30,000 40,000 4 40,000 30,000 40,000 5 100,000 130,000 120,000 Calculate the net profit, payback period, return on investment (ROI), and net present value (NPV) of all projects. Discount rate= 3.00% a) Show your calculated discount rate and fill in the table. Project A Project...
Capital Budgeting Analysis: Wolverine Corporation Year 1 40,000 Year 0 Year 2 Year 3 1 Demand 2 P...
Capital Budgeting Analysis: Wolverine Corporation Year 1 40,000 Year 0 Year 2 Year 3 1 Demand 2 Price per unit 3 Total revenue = (1) × (2) 4 Variable cost per unit 5 Total variable cost- (1) x (4) 6 Fixed cost 7 Interest expense of New Zealand loan 8 Noncash expense (depreciation) 9 Total expenses = (5)+(6)-(7)+(8) 10 Before-tax earnings of subsidiary (3)-(9) 11 Host government tax (30%) 12 After-tax earnings of subsidiary 13 Net cash flow to subsidiary...
Restate the above net cash flow in real terms. Discount the restated cash flows at a...
Restate the above net cash flow in real terms. Discount the
restated cash flows at a real discount rate. Assume a 20% nominal
rate and 10% expected inflation. NPV should be unchanged at +2,593,
or $2,593,000.
($ thousands) Period 1 - 14,100 -1,634 3.097 - 14,100 -1,362 2.151 2,593 (sum of PVS) Net cash flow Present value at 20% Net present value 3 6,473 3.746 4 10.684 5,152 5 10,135 4,073 6 5.907 1,978 7 3.419 954 Restate the above...
*First, what is the annual operating cash flow of the project for year 1? *What is the annual operating cash flow of...
*First, what is the annual operating cash flow of the project
for year 1?
*What is the annual operating cash flow of the project for
year 2?
*What is the annual operating cash flow of the project for
year 3?
*What is the annual operating cash flow of the project for
year 4?
*What is the annual operating cash flow of the project for
year 5?
*Next, what is the after-tax cash flow of the equipment at
disposal?
*Then, what...
3. Consider Table 2 Table 2 Year 3 Year 4 Cash flow Year 2 Year 0 Year 1 Cash flovw Cash flow Cash flow 70 Cash flow Project 80 70 30 -150 0.24 Interest Tax Shield 0.75 (a)Consider Table 2. Calculate the net present value of the project assuming it is all-equity financed. The required return on unlevered equity is 15%. (b)Consider Table 2. Assume for now that the project is financed using equal parts debt and equity. The cost...
Given the cash flow described in table below. Determine the
ROR.
Given the cash flow described in table below. Determine the ROR. Year 0 1-2 3-5 6-10 Cash flow -15,000 4,000 3,000 1,500 20% 18% 15% 13%
14. The following table shows the cash flow for the costs of the Self Performing Contractor and estimates for revenues from a residential project. (in x1000 TL) a) Calculate the Net Cash Flow and the Cumulative Cash Flow for the project (2 points) b) What is the payback period for the project? (2 points) c) What is the Net Present Value (NPV) of the project to the Self Performing Contractor, if the discount rate is i=7% (3 points). d) Would...
2. A certain project has a duration of 7 years with the Outbound cash flow reported in Table 1. Two alternative terms of payment are reported in Table 2 and 3. The currency is Millions of Dollars. The discount rate (or WACC) is 10% TABLE 1 Year Outbound cash flow 0 10 1 20 2 20 3 50 4 70 5 50 6 20 7 10 TABLE 2-CASE A Year Inbound cash flow 0 20 4 30 5 30 6...
Capital Budgeting Analysis: Wolverine Corporation Year 1 40,000 Year 0 Year 2 Year 3 1 Demand 2 Price per unit 3 Total revenue = (1) × (2) 4 Variable cost per unit 5 Total variable cost- (1) x (4) 6 Fixed cost 7 Interest expense of New Zealand loan 8 Noncash expense (depreciation) 9 Total expenses = (5)+(6)-(7)+(8) 10 Before-tax earnings of subsidiary (3)-(9) 11 Host government tax (30%) 12 After-tax earnings of subsidiary 13 Net cash flow to subsidiary...
Restate the above net cash flow in real terms. Discount the
restated cash flows at a real discount rate. Assume a 20% nominal
rate and 10% expected inflation. NPV should be unchanged at +2,593,
or $2,593,000.
($ thousands) Period 1 - 14,100 -1,634 3.097 - 14,100 -1,362 2.151 2,593 (sum of PVS) Net cash flow Present value at 20% Net present value 3 6,473 3.746 4 10.684 5,152 5 10,135 4,073 6 5.907 1,978 7 3.419 954 Restate the above...
*First, what is the annual operating cash flow of the project
for year 1?
*What is the annual operating cash flow of the project for
year 2?
*What is the annual operating cash flow of the project for
year 3?
*What is the annual operating cash flow of the project for
year 4?
*What is the annual operating cash flow of the project for
year 5?
*Next, what is the after-tax cash flow of the equipment at
disposal?
*Then, what...
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