Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.
Time | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
Cash Flow | -5,000 | 1,200 | 2,400 | 1,600 | 1,600 | 1,400 | 1,200 |
Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
NPV =
Ans NPV = $ 614.90
Since NPV is positive the project must be selected.
Calculations are as follows:
Suppose your firm is considering investing in a project with the cash flows shown below, that...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: Cash flow: -$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200 Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2...
Suppose your firm is considering investing in a project with cash flows below, that the required rate of return on projects of this risk class is 8%, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years respectively. Time 0. 1. 2. 3. 4. 5. 6. Cashflow -$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200 Use the payback decision rule to evaluate this project; should it be accepted or rejected? Please Use Excel...
Suppose your firm is considering Investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively. Time: Cash flow: $235,000 $65,00 33,000 $1,000 $122,000 $1,200 Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to 2 decimal...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 7 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: –$5,300 $1,300 $2,500 $1,700 $1,700 $1,500 $1,300 Use the discounted payback decision rule to evaluate this project. (Round your answer to...
13.4:Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: –$5,200 $1,290 $2,490 $1,690 $1,690 $1,490 $1,290 Use the discounted payback decision rule to evaluate this project. (Round your answer to...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 9 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: Cash flow : 0 -$15,400 1 $3,200 2 $4,400 3 $3,600 $3,600 5 $3,400 6 $3,200 Use the MIRR decision rule to evaluate this project. (Do not round intermediate calculations...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: –$7,400 $1,120 $2,320 $1,520 $1,520 $1,320 $1,120 Use the IRR decision rule to evaluate this project. IRR=__%
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 11 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3 and 3.5 years, respectively. Time: 0 1 2 3 4 5 Cash flow: –$235,000 $65,800 $84,000 $141,000 $122,000 $81,200 Use the NPV decision rule to evaluate this project. (Do not round intermediate calculations and round...
Suppose your firm is considering Investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Cantelow. -57,100 $1,110 2,310 31,510 1.$10 21 310 1110 Use the IRR decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Round your answer to...
Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and 3.5 years, respectively. Time: 4 Cash flow-$245, 000 $66,800 $85,000 $142,000 $123,000 $82,200 Use the discounted payback decision rule to evaluate this project. (Do not round intermediate calculations and round your final answer to...