Triangle Corp is planning to buy a new computer for $750,000 with a useful life of...
Triangle Corp is planning to buy a new computer for $750,000 with a useful life of six years. At the end of six years, the system will have no value. Over the six years the system will save them $250,000 each year for the first three years and $100,000 each year for the last three years.
a. What is the NPV of the project if Triangle Corp requires a return of 15%?
b. What is the IRR for this project?
c. At what required rate of return is the project’s NPV = 0?
d. How are NPV and IRR related?
e. At a required rate of return of 15%, is the project acceptable?
Homework Answers
Add Answer to:
Triangle Corp is planning to buy a new computer for $750,000
with a useful life of...
Hardware Corp. is planning to buy production machinery. This machinery's expected useful life is 5 years,...
Hardware Corp. is planning to buy production machinery. This machinery's expected useful life is 5 years, with a $10,000 salvage value. They require a minimum rate of return of 12%, and have calculated the following data pertaining to the purchase and operation of this machinery: Year Estimated annual cash inflows $ 60,000 80,000 95,000 115,000 140,000 Estimated annual cash outflows $ 10,000 20,000 25,000 35,000 50,000 Depreciation $30,000 $30,000 $30,000 $30,000 $30,000 Determine the Payback Period, Accounting Rate of Return....
Capital Budgeting Analysis: The MCSL Corp. is planning a new investment project which is expected to...
Capital Budgeting Analysis: The MCSL Corp. is planning a new investment project which is expected to yield cash inflows of $180,000 per year in Years 1 through 3, $225,000 per year in Years 4 through 7, and $185,000 in Years 8 through 10. This investment will cost the company $880,000 today (initial outlay). We assume that the firm's cost of capital is 7.8%. (1) Draw a time line to show the cash flows of the project. 2) Compute the project’s...
Problem 10 Intro Better Tires Corp. is planning to buy a new tire making machine for...
Problem 10 Intro Better Tires Corp. is planning to buy a new tire making machine for $80,000 that would save it $80,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The appropriate cost of capital for this project is 15% and the tax rate is 21%. Part 1 18 - Attempt 1/5 for 10 pts....
no 3! need the working according to formula! not excel sheet. 2) Which of the following...
no 3! need the working according to formula! not excel
sheet.
2) Which of the following statements is MOST correct? A) It a project's internal rate of return (IRR) exceeds the required return, then the project's net present value (NPV) must be negative. B) If Project A has a higher IRR than Project B, then Project A must also have a higher NPV. (C) The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return...
DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is...
DYI Construction Co. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $250,000 in year three, and $180,000 in year four. DYI's required rate of return is 8%. What is the net present value of this project? $87,417 $96,320 $104,089 $183,472
Capital Budgeting Analysis : A firm is planning a new project that is projected to yield cash flo...
Capital Budgeting Analysis : A firm is planning a new project that is projected to yield cash flows of - $595,000 in Year 1, $586,000 per year in Years 2 through 5, and $578,000 in Years 6 through 11. This investment will cost the company $2,580,000 today (initial outlay). We assume that the firm's cost of capital is 11%. (1) Draw a timeline to show the cash flows of the project. (2) Compute the project’s payback period, net present value...
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,...
10 points Question 8 Save Answer Siegmeyer Corp. is considering a new inventory system that will...
10 points Question 8 Save Answer Siegmeyer Corp. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. Siegmeyer's required rate of return is 8%. Based on the NPV calculated previously, Siegmeyer should the project because its NPV is greater than Accept; zero Reject; zero...
Riggs Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that...
Riggs Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that this action will result in additional cash flows of $300,070 over the next three years. If the discount rate is 17.5 percent, what is the NPV on this project?
Sunland Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that...
Sunland Corp. management is planning to spend $650,000 on a new marketing campaign. They believe that this action will result in additional cash flows of $309,000 each year for three years. If the discount rate is 17.5 percent, what is the NPV on this project? (Enter negative amounts using negative sign e.g. -45.25. Do not round discount factors. Round other intermediate calculations and final answer to 0 decimal places, e.g. 1,525.)
Hardware Corp. is planning to buy production machinery. This machinery's expected useful life is 5 years, with a $10,000 salvage value. They require a minimum rate of return of 12%, and have calculated the following data pertaining to the purchase and operation of this machinery: Year Estimated annual cash inflows $ 60,000 80,000 95,000 115,000 140,000 Estimated annual cash outflows $ 10,000 20,000 25,000 35,000 50,000 Depreciation $30,000 $30,000 $30,000 $30,000 $30,000 Determine the Payback Period, Accounting Rate of Return....
Problem 10 Intro Better Tires Corp. is planning to buy a new tire making machine for $80,000 that would save it $80,000 per year in production costs. The savings would be constant over the project's 3-year life. The machine is to be linearly depreciated to zero and will have no resale value after 3 years. The appropriate cost of capital for this project is 15% and the tax rate is 21%. Part 1 18 - Attempt 1/5 for 10 pts....
no 3! need the working according to formula! not excel
sheet.
2) Which of the following statements is MOST correct? A) It a project's internal rate of return (IRR) exceeds the required return, then the project's net present value (NPV) must be negative. B) If Project A has a higher IRR than Project B, then Project A must also have a higher NPV. (C) The IRR calculation implicitly assumes that all cash flows are reinvested at a rate of return...
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,...
10 points Question 8 Save Answer Siegmeyer Corp. is considering a new inventory system that will cost $750,000. The system is expected to generate positive cash flows over the next four years in the amounts of $350,000 in year one, $325,000 in year two, $150,000 in year three, and $180,000 in year four. Siegmeyer's required rate of return is 8%. Based on the NPV calculated previously, Siegmeyer should the project because its NPV is greater than Accept; zero Reject; zero...
Most questions answered within 3 hours.
-
Write the ionic equations for the first stage of salts
hydrolysis.
Anion, Cation?
Na2S
NiSO4
K2SO4...
asked 38 minutes ago -
suppose there is a normally distributed population with a mean of
250 and a standard deviation...
asked 1 hour ago -
Question Three
Suppose you as project manager are using the Waterfall
development methodology on a large...
asked 2 hours ago -
Which statement is not true about welfare in Canada?
A.Benefits typically vary based on one's ability...
asked 2 hours ago -
Please help me with FLOWCHART and UML diagram for class,
thank you!
#include <iostream>
#include <fstream>...
asked 3 hours ago -
3. Describe the “logic circuit” of the Lac operon. Which
proteins are bound or not to...
asked 3 hours ago -
Ayesha’s adjusted gross income is $60,000 in 2019. She donated a
piece of artwork with a...
asked 3 hours ago -
For Dijkstra’s shortest path algorithm:
a. Give the Big-O time for Dijkstra’s shortest path algorithm
and...
asked 3 hours ago -
Phosphorus violates the 'octet rule' in biological molecules,
forming more covalent bonds than expected based on...
asked 4 hours ago -
A 1.3 eV electron has a 10-4 probability of tunneling
through a 2.4 eV potential barrier....
asked 4 hours ago -
What is the one ingredient that is common to being successful
with all stakeholders?
profit
trust...
asked 4 hours ago -
Write an assembly language 32 bit program that reads in lines of
text by a .txt...
asked 4 hours ago