the discount rate to be used for discount cashflows from a project is:
the discount rate to be used for discount cashflows from a project is:
the WACC is used to discount project cashflows because:
A project has the following after-tax cashflows. The tax rate is 30% and the appropriate discount rate is 10%. Year 0: -2,000 Year 1: 600 Year 2: 600 Year 3: 600 Year 4: 600 Year 5: 600 What is the project Payback Period?IMPORTANT. Format your answer in years with two decimal places. For example 2 and a half years would be 2.50, not 2 years 6 months. Do not write in the word "Years". Just write in a number with...
Required : (a) What is the profitability index for the cashflows if the relevant discount rate is 10 percent? (b) What is the profitability index for the cashflows if the relevant discount rate is 14 percent? (c) What is the profitability index for the cashflows if the relevant discount rate is 22 percent? Year Cash Flow 0 −$8,400 1 3,000 2 5,000 3 4,000
A firm is considering a project that has the following estimated cashflows: Increased sales to business of $160,000 for the next 5 years (starting in one year's time). Increased costs of $20,000 for the next five years (starting in one year's time). The initial capital expenditure required is $100,000, and salvage value at the end of 5 years is expected to be $30,000. Cost of the feasibility study is $10,000. If the firm is facing a discount rate of 11%,...
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.
You are considering the incremental cashflows for project year one. As a result of your new project, You expect that sales will increase $10000 in year one. Your operating expenses will increase by $3000 as a result of this project. Depreciation of equipment for this project will be $2000 in year one. You also took out a loan to finance the new machine and you owe a $100 interest payment. The applicable tax rate is 25%. What is the EBIT...
You are considering the incremental cashflows for project year one. As a result of your new project, You expect that sales will increase $10000 in year one. Your operating expenses will increase by $3000 as a result of this project. Depreciation of equipment for this project will be $2000 in year one. You also took out a loan to finance the new machine and you owe a $100 interest payment. The applicable tax rate is 25%. What is the new...
You are considering the incremental cashflows for project year one. As a result of your new project, You expect that sales will increase $10000 in year one. Your operating expenses will increase by $3000 as a result of this project. Depreciation of equipment for this project will be $2000 in year one. You also took out a loan to finance the new machine and you owe a $100 interest payment. The applicable tax rate is 25%. What is the incremental...
You are considering the incremental cashflows for project year one. As a result of your new project, You expect that sales will increase $10000 in year one. Your operating expenses will increase by $3000 as a result of this project. Depreciation of equipment for this project will be $2000 in year one. You also took out a loan to finance the new machine and you owe a $100 interest payment. The applicable tax rate is 25%. What is the CASH...
The discount rate assigned to an individual project should be based on: Multiple Choice the company's overall weighted average cost of capital. the actual sources of funding used for the project. an average of the company's overall cost of capital for the past five years. the current risk level of the overall firm. the risks associated with the use of the funds required by the project.