A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,00...

Question

Question

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,00...

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,000 in years 6-12. The company's required return is 12%. Given this information calculate the IRR of the project.

business finance

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

9=7 1 (x2 1 +1)/000*083+ (441 +1)/000*0+] = 000‘osz

Using Trial and Error Method,

IRR = 9.32%

Add a comment

Answer 2

Similar Homework Help Questions

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years...

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,000 in years 6-12. The company's required return is 12%. Given this information calculate the IRR of the project.
A project that provides annual cash flows of $21,000 for 5 years costs $67,000 today. ...

A project that provides annual cash flows of $21,000 for 5 years costs $67,000 today. a. If the required return is 15 percent, what is the NPV for this project? b. Determine the IRR for this project.
A project has annual cash flows of $6,500 for the next 10 years and then $11,000...

A project has annual cash flows of $6,500 for the next 10 years and then $11,000 each year for the following 10 years. The IRR of this 20-year project is 13.41%. If the firm's WACC is 12%, what is the project's NPV?

A project has estimated annual cash flows of $90,000 for 3 years and is estimated to...

A project has estimated annual cash flows of $90,000 for 3 years and is estimated to cost $250,000. Assume a minimum acceptable rate of return of 10%. Present Value of $1 at Compound Interest Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690...
A project that provides annual cash flows of $13,900 for 12 years costs $90,244 today. ...

A project that provides annual cash flows of $13,900 for 12 years costs $90,244 today. a. If the required return is 8 percent, what is the NPV for this project? b. Determine the IRR for this project.
A project that provides annual cash flows of $11,700 for 12 years costs $79,720 today. ...

A project that provides annual cash flows of $11,700 for 12 years costs $79,720 today. a. If the required return is 15 percent, what is the NPV for this project? b. Determine the IRR for this project.

A project has annual cash flows of $5,000 for the next 10 years and then $10,500...

A project has annual cash flows of $5,000 for the next 10 years and then $10,500 each year for the following 10 years. The IRR of this 20-year project is 13.66%. If the firm's WACC is 12%, what is the project's NPV? Round your answer to the nearest cent.
1) A project has annual cash flows of $5,000 for the next 10 years and then...

1) A project has annual cash flows of $5,000 for the next 10 years and then $6,500 each year for the following 10 years. The IRR of this 20-year project is 12%. If the firm's WACC is 11%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent. 2) Project S costs $12,000 and its expected cash flows would be $7,000 per year for 5 years. Mutually exclusive Project L costs $25,000 and...
A project has annual cash flows of $7,000 for the next 10 years and then $8,500...

A project has annual cash flows of $7,000 for the next 10 years and then $8,500 each year for the following 10 years. The IRR of this 20-year project is 12.17%. If the firm's WACC is 12%, what is the project's NPV? Do not round intermediate calculations. Round your answer to the nearest cent.

IBM is evaluating a project in Eutopia. The project will create the following cash flows: Year...

IBM is evaluating a project in Eutopia. The project will create the following cash flows: Year $ 0 -1,330,000 1 250,000 2 470,000 3 450,000 4 215,000 5 95,000 All cash flows will occur in Eutopia and are expressed in dollars. In an attempt to improve its economy, the Eutopia’s government has declared that all cash flows created by a foreign company are “blocked” and must be reinvested with the government for one year. The reinvestment rate for these funds...

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,00...

Homework Answers

Add Answer to:
A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,00...

Post as a guest

Earn Coins

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years...

A project that provides annual cash flows of $21,000 for 5 years costs $67,000 today. ...

A project has annual cash flows of $6,500 for the next 10 years and then $11,000...

A project has estimated annual cash flows of $90,000 for 3 years and is estimated to...

A project that provides annual cash flows of $13,900 for 12 years costs $90,244 today. ...

A project that provides annual cash flows of $11,700 for 12 years costs $79,720 today. ...

A project has annual cash flows of $5,000 for the next 10 years and then $10,500...

1) A project has annual cash flows of $5,000 for the next 10 years and then...

A project has annual cash flows of $7,000 for the next 10 years and then $8,500...

IBM is evaluating a project in Eutopia. The project will create the following cash flows: Year...

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,00...

Homework Answers

Add Answer to: A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,00...

Post as a guest

Earn Coins

Add Answer to:
A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,00...