Suppose that you are evaluating an investment opportunity with the following incremental free-cash-flows. What is difference between the largest and smallest discount rates that make the NPV equal to zero? Enter your answer as a percent, do not include the %. Round your final answer to two decimals.
Timeline |
0 |
1 |
2 |
3 |
4 |
FCF |
-47,000 |
50,000 |
40,000 |
-17,000 |
-27,000 |
Using excel formula to calculate 2 IRRs
A | B | C | D | E | ||
Timeline | 0 | 1 | 2 | 3 | 4 | |
1 | FCF | -47,000 | 50,000 | 40,000 | -17,000 | -27,000 |
IRR 1 | 4.98% | Excel formula | IRR(A1:E1,0%) | |||
IRR 2 | 16.30% | Excel formula | IRR(A1:E1,12%) |
Difference in IRRs =16.30%-4.98% =11.32%
Suppose that you are evaluating an investment opportunity with the following incremental free-cash-flows. What is difference...
Suppose that you are evaluating an investment opportunity with the following incremental free-cash-flows. What is difference between the largest and smallest discount rates that make the NPV equal to zero? Enter your answer as a percent, do not include the %. Round your final answer to two decimals. Timeline 0 1 2 3 4 FCF -37,000 40,000 30,000 -7,000 -27,000
Suppose that you are evaluating an investment opportunity with the following incremental free-cash-flows. What is difference between the largest and smallest discount rates that make the NPV equal to zero? Enter your answer as a percent, do not include the %. Round your final answer to two decimals. Timeline 0 1 2 3 4 FCF -37,000 40,000 30,000 -7,000 -27,000
Suppose ABC corp. is evaluating a project with the following incremental free-cash-flows (FCF) paid at the end of the next four years. Which annual discount rate makes the NPV equal to zero? Enter your answer as a percent. Round your final answer to two decimals. Timeline 0 1 2 3 4 FCF -500 200 200 200 200
Suppose ABC corp. is evaluating a project with the following incremental free-cash-flows (FCF) paid at the end of the next four years. Which annual discount rate makes the NPV equal to zero? Enter your answer as a percent do not include the %. Round your final answer to two decimals. Timeline 0 1 2 3 4 FCF -500 200 200 200 200
Suppose that you are evaluating an investment opportunity with the following end of year cash flows. What is the IRR? Enter your answer as a percent, do not include the %. Round your final answer to two decimals. Timeline 0 1 2 3 Free-cash-flow 200 200 200 -2000
Given the following end of year cash flows (CF), what is the net-present value (NPV) of this investment opportunity. Assume that the project’s cost of capital is 10%. Round your final answer to two decimals. Timeline 0 1 2 3 4 CF -900 400 400 400 800
An investment has an installed cost of $531,800. The cash flows over the four-year life of the investment are projected to be $217,850, $234,450, $201,110, and $149,820. If the discount rate is zero, what is the NPV? (Omit $ sign in your response.) NPV $ ______ If the discount rate is infinite, what is the NPV? (Negative answer should be indicated by a minus sign. Omit $ sign in your response.) NPV $ ______ At what discount rate...
Suppose that TXY Corp. will currently generate free-cash-flows (FCF) of $300 at the end of the year. TXY has a cost of equity capital of 20%, a market value debt-to-equity ratio of zero, and faces a 21% tax rate. Assuming that TXY's FCF will grow by 3% per year in the future, and any new debt would be risk-free and carry a 5% interest rate, what would be the value of the interest tax shields created if TXY's market value...
1 Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $200 at the end of the year. XYZ has a cost of equity capital of 10%, a cost of debt capital of 5%, a market value debt-to-equity ratio of one, and faces a 21% tax rate. Assuming that XYZ’s FCF will grow by 3% per year in the future, what is the value of XYZ Corp? Round your final answer to two decimals? 2 Suppose that XYZ Corp. will generate...
1. Suppose that XYZ Corp. will generate free-cash-flows (FCF) of $200 at the end of the year. XYZ has a cost of equity capital of 10%, a cost of debt capital of 5%, a market value debt-to-equity ratio of one, and faces a 21% tax rate. Assuming that XYZ’s FCF will grow by 3% per year in the future, what is the value of XYZ Corp? Round your final answer to two decimals? 2. Suppose that XYZ Corp. will generate...