What is the NPV for a 3 year project with an initial investment of $100,000, an...
What is the NPV for a 3 year project with an initial investment of $100,000, an opportunity cost of capital of 6% and the following cash flows?
Yr. 1 - $35,000
Yr. 2 - $40,000
Yr. 3 - $45,000
Homework Answers
Net present value is solved here using a financial calculator. The steps to solve on the financial calculator:
- Press the CF button.
- CF0= -$100,000. It is entered with a negative sign since it is a cash outflow.
- Cash flow for all the years should be entered.
- Press Enter and down arrow after inputting each cash flow.
- After entering the last cash flow, press the NPV button and enter the opportunity cost of capital of 6%.
- Press the down arrow and CPT buttons to get the net present value.
The net present value is $6,401.59.
In case of any query, kindly comment on the solution.
Add Answer to:
What is the NPV for a 3 year project with an initial investment
of $100,000, an...
What is the NPV of a project that has an initial investment of $100,000, and expected...
What is the NPV of a project that has an initial investment of $100,000, and expected cash flows of $45,000 each year for years 1 through 3? Use an 8% hurdle (aka discount) rate. Is this a project you should accept or reject? Calculate the Profitability Index for the project as well.
Problem 6-15 Project NPV and IRR A project requires an initial investment of $100,000 and is...
Problem 6-15 Project NPV and IRR A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,700 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 9%. Ignore inflation. a. Calculate project...
What is the NPV of a project which reauires an initial investment od $100,000, generates cash...
What is the NPV of a project which reauires an initial investment od $100,000, generates cash flows kf $25,000, $50,000, $75,000, and $100,000 in years 1 through 4, then requires another investment of $50,000 in year 5? The required rate of return is 12%. A. $100,000 B. $29,116 C. $50,745 D. $79,116
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,500 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 10%. Ignore inflation. a. Calculate project NPV for each company. (Do not...
A project Kyle Company is considering will require an initial investment of $100,000 and is expected...
A project Kyle Company is considering will require an initial investment of $100,000 and is expected to generate the following cash flows: Year 1 $35,000 Year 2 $25,000 Year 3 $20,000 Year 4 $20,000 Year 5 $15,000 What is the project’s payback period?
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,700 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 11%. Ignore inflation. a. Calculate project NPV for each company. (Do not...
NPV Calculate the net present value (NPV) for a 20-year project with an initial investment of...
NPV Calculate the net present value (NPV) for a 20-year project with an initial investment of $10,000 and a cash inflow of $2,000 per year. Assume that the firm has an opportunity cost of 16%. Comment on the acceptability of the project. The project's net present value is $ (Round to the nearest cent.)
ABC Telecom is considering a three-year project that has a weighted average cost of capital of 12% and a NPV of $49,876. ABC Telecom can replicate this project indefinitely. What is the equivalent annual annuity (EAA) for this project?
ABC Telecom has to choose between two mutually exclusive projects. If it chooses project A, ABC Telecom will have the opportunity to make a similar investment in three years. However, if it chooses project B, it will not have the opportunity to make a second investment. The following table lists the cash flows for these projects. If the firm uses the replacement chain (common life) approach, what will be the difference between the net present value (NPV) of project A...
NPV Calculate the net present value (NPV) for a 30-year project with an initial investment of...
NPV Calculate the net present value (NPV) for a 30-year project with an initial investment of $25,000 and a cash inflow of $4,000 per year. Assume that the firm has an opportunity cost of 18% Comment on the acceptability of the project. The project's net present value is S□ (Round to the nearest cent ) Enter your answer in the answer box and then click Check Answer part remainin Clear All javascriptdoExercise(3);
A project requires an initial investment of $100,000 and is expected to produce a cash inflow...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,200 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 35% and can depreciate the investment for tax purposes using the five-year MACRS tax depreciation schedule. Suppose the opportunity cost of capital is 10%. Ignore inflation. a. Calculate project...
Problem 6-15 Project NPV and IRR A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $26,700 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 9%. Ignore inflation. a. Calculate project...
A project requires an initial investment of $100,000 and is expected to produce a cash inflow before tax of $27,500 per year for five years. Company A has substantial accumulated tax losses and is unlikely to pay taxes in the foreseeable future. Company B pays corporate taxes at a rate of 21% and can claim 100% bonus depreciation on the investment. Suppose the opportunity cost of capital is 10%. Ignore inflation. a. Calculate project NPV for each company. (Do not...
NPV Calculate the net present value (NPV) for a 20-year project with an initial investment of $10,000 and a cash inflow of $2,000 per year. Assume that the firm has an opportunity cost of 16%. Comment on the acceptability of the project. The project's net present value is $ (Round to the nearest cent.)
NPV Calculate the net present value (NPV) for a 30-year project with an initial investment of $25,000 and a cash inflow of $4,000 per year. Assume that the firm has an opportunity cost of 18% Comment on the acceptability of the project. The project's net present value is S□ (Round to the nearest cent ) Enter your answer in the answer box and then click Check Answer part remainin Clear All javascriptdoExercise(3);
Most questions answered within 3 hours.
-
Verify the MIRR is 9.29% given cash flows in years 1 and 2 of
$1,000 each,...
asked 49 minutes ago -
Calculate the pH of a 5.7 M solution of aniline (C6H5NH2; Kb =
3.8 x 10^-10)
asked 2 hours ago -
LSL R3, R3, R12
Memory
Address
Orig.
Data
Updated
Data
Register
Orig.
Data
Updated
Data
0x84F0...
asked 2 hours ago -
Air at 100 kPa and density of 1.2 kg/m3 flows upward through a
5-cm diameter inclined...
asked 2 hours ago -
Define the following concepts in your own words: (a) stiffness,
(b) strength, (c) strain,
(d) ductility,...
asked 3 hours ago -
In C++
In this homework, you will be tasked with creating functions to
manipulate strings that...
asked 4 hours ago -
An isolated colony represents a pure culture. one rare occasions
, however , a colony can...
asked 4 hours ago -
*****DO NOT ANSWER THIS QUESTION IF YOU DON'T
KNOW*******Rights and Duties of Auditors; Minimum 4000
words...
asked 5 hours ago -
The probability that Janie is wearing sunglasses is 1/4. The
probability that she is wearing sunglasses...
asked 5 hours ago -
Do you believe social media is more of a help or a hindrance in
controlling crises...
asked 6 hours ago -
Two long, parallel wires separated by 2.85 cm carry currents in
opposite directions. The current in...
asked 5 hours ago -
Question # 1. Develop a list of rehabilitation journals
that publish articles concerning career counseling for...
asked 6 hours ago