1.A real estate investment has the following expected cash flows: YEAR CASH FLOW 0 -$102,359.00 1...
1.A real estate investment has the following expected cash flows:
| YEAR | CASH FLOW |
|---|---|
| 0 | -$102,359.00 |
| 1 | $13,862.00 |
| 2 | $28,729.00 |
| 3 | $50,167.00 |
| 4 | $41,494.00 |
The investor wants a 9.00% return on this investment. What is the
NPV of this opportunity?
2.A new IT server for a company will cost $447,481.00 today. The company expects the server will create an incremental cash flow to the firm of $130,370.00 per year. The company wants an 10.00% return for all capital budgeting projects. The company will run the server for the next 5 years.
What is the NPV of this project?
Homework Answers
1. NPV of the real estate project using excel = 2672.58
2. NPV of the IT project = -447481 + 130370*(1 - 1.1^-5)/0.1 = 46723.87
Add Answer to:
1.A real estate investment has the following expected cash
flows:
YEAR
CASH FLOW
0
-$102,359.00
1...
A real estate investment has the following expected cash flows: YEAR CASH FLOW 0 -$113,435.00 1...
A real estate investment has the following expected cash flows: YEAR CASH FLOW 0 -$113,435.00 1 $12,051.00 2 $29,277.00 3 $50,339.00 4 $47,576.00 The investor wants a 6.00% return on this investment. What is the NPV of this opportunity?
A real estate property has the following expected cash flows: YEAR CASH FLOW 0 -$94,117.00 1...
A real estate property has the following expected cash flows: YEAR CASH FLOW 0 -$94,117.00 1 $10,661.00 2 $25,700.00 3 $50,470.00 4 $38,629.00 The investor wants to earn at least 10.00% on any real estate property. Based on the IRR of this investment, should the investor purchase this property? (YES OR NO)
A real estate investment has the following expected cash flows: &nbs
A real estate investment has the following expected cash flows: Year Cash Flows 1 $10,000 2 25,000 3 50,000 4 40,000 The discount rate is 7 percent. What is the investment's present value?
A real estate investment has the following expected cash flows: Year Cash Flows 1 $10,000 2...
A real estate investment has the following expected cash flows: Year Cash Flows 1 $10,000 2 25,000 3 50,000 4 35,000 The initial cost is $85,000. The discount rate is 8.25 percent. What is the investment's present value? a). $10,479 b). $13,479 c.) $16,479 d). $14,479 e). $15,479
A company has a project available with the following cash flows: year cash flow 0 -$32,630 1 $12,990 2 $14,74...
A company has a project available with the following cash flows: year cash flow 0 -$32,630 1 $12,990 2 $14,740 3 $20,640 4 11,840 If the required return for the project is 9.3 percent, what is the projects NPV?
Your firm has identified three potential investment projects. The projects and their cash flows are shown...
Your firm has identified three potential investment projects. The projects and their cash flows are shown here: Cash Flow Today (millions) $7 $7 $18 Cash Flow in One Year (millions) $23 $3 -$8 Project Suppose all cash flows are certain and the risk-free interest rate is 11%. a. What is the NPV of each project? b. If the firm can choose only one of these projects, which should it choose? c. If the firm can choose any two of these...
Your firm has identified three potential investment projects. The projects and their cash flows are shown...
Your firm has identified three potential investment projects. The projects and their cash flows are shown below: Project Cash Flow Today (millions) Cash Flow in One Year (millions) A -$7 $15 B $7 $4 C $19 -$6 Suppose all cash flows are certain and the risk-free interest rate is 9%. (a) The NPV of Project A is $Answermillion. (Round to two decimal places.) (b) The NPV of Project B is $Answermillion. (Round to two decimal places.) (c) The...
02. You are evaluating a peculiar real-estate venture that has the following cash flows: an outflow...
02. You are evaluating a peculiar real-estate venture that has the following cash flows: an outflow of IS210K at the end of the first year, a cash flow of IS98K in three years, a cash inflow of 1$101K two years after the preceding cash flow, a four-year annuity of cash flows with the first I$S70K cash flow occurring at t 9, and a perpetual series of $10K cash flows starting with the first cash flow 15 years from today. (a)...
1. Investment consideration of $2,225,000 Cash flows Year 1- 300,000 Year 2- 475,000 Year 3-&nb...
1. Investment consideration of $2,225,000 Cash flows Year 1- 300,000 Year 2- 475,000 Year 3- 500,000 Year 4- 500,000 WACC 10% when evaluation proposed capital budgeting projects. Determine the Projects PI based on these cash flow A .6834 B .7456 C .6213 D .5902 2. The company’s decision to accept or reject this project is independent of its decision on other projects. Based on the projects PI should theiform accept or reject this project? 3. By comparison, the...
A real estate investment has the following expected cash flows: Cash Flows $8,000 19,000 24,000 21,000...
A real estate investment has the following expected cash flows: Cash Flows $8,000 19,000 24,000 21,000 Year 1 2 3 4 The discount rate is 9 percent. What is the investment's present value? Round your answer to 2 decimal places; for example 2345.25.
Your firm has identified three potential investment projects. The projects and their cash flows are shown here: Cash Flow Today (millions) $7 $7 $18 Cash Flow in One Year (millions) $23 $3 -$8 Project Suppose all cash flows are certain and the risk-free interest rate is 11%. a. What is the NPV of each project? b. If the firm can choose only one of these projects, which should it choose? c. If the firm can choose any two of these...
02. You are evaluating a peculiar real-estate venture that has the following cash flows: an outflow of IS210K at the end of the first year, a cash flow of IS98K in three years, a cash inflow of 1$101K two years after the preceding cash flow, a four-year annuity of cash flows with the first I$S70K cash flow occurring at t 9, and a perpetual series of $10K cash flows starting with the first cash flow 15 years from today. (a)...
A real estate investment has the following expected cash flows: Cash Flows $8,000 19,000 24,000 21,000 Year 1 2 3 4 The discount rate is 9 percent. What is the investment's present value? Round your answer to 2 decimal places; for example 2345.25.
Most questions answered within 3 hours.
-
With a $16 Trillion national ebt, and projected annual budget
eficits in excess of $1 Trillion...
asked 1 minute from now -
A machine shop owner wishes to assign each of three machinists
(labeled 1, 2, and 3)...
asked 12 minutes ago -
Regarding language development, which of the following
statements is FALSE?
Babies are able to cry from...
asked 11 minutes ago -
A couple of small ice cubes at 0 °C are added to glass of warm
water...
asked 9 minutes ago -
Slow 'n Steady, Inc., has a stock price of $30, will pay a
dividend next year...
asked 13 minutes ago -
During the current financial year, the owner of Omega
Enterprises withdrew supplies of $2,000 for personal...
asked 9 minutes ago -
PLEASE SHOW MATH CALCULATION(formulas)it has to be done on excel
P12-4 Last year (2016), Richter Condos...
asked 17 minutes ago -
A 0.25μF capacitor is charged to 50 V . It is then connected in
series with...
asked 33 minutes ago -
Calculate the current, I, through the batteries for:
- a 2-bulb parallel circuit
- How does...
asked 35 minutes ago -
Choose the sentence that uses correct punctuation.
1a. The prefatory parts of a report include the...
asked 41 minutes ago -
For the element arsenic, which one of the following sets of
quantum numbers could not apply...
asked 50 minutes ago -
Compare and contrast the architectures of 3 types of ADCs:
Flash, SAR, and pipelined. Use the...
asked 51 minutes ago