ZuoTi.Pro
Question

Question 1 (1) Refer to the Capital Budgeting Narrative. What is the NPV of the project? Capital Budgeting Narrative: Aferin
image.png
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

1)

NPV

=-53000+12000/(1+8%)^1+27000/(1+8%)^2+27000/(1+8%)^3+70000/(1+8%)^4

=54145

2)

payback period

=2+(53000-12000-27000)/27000

=2.5 years

the above is answer..

0 0
Add a comment
Know the answer?
Add Answer to:
Question 1 (1) Refer to the Capital Budgeting Narrative. What is the NPV of the project? Capital Budgeting Narrati...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Question 2 1 pts (2) Refer to the Capital Budgeting Narrative. What is the Payback Period...

    Question 2 1 pts (2) Refer to the Capital Budgeting Narrative. What is the Payback Period of the project? Capital Budgeting Narrative: Aferin Electric is considering a new project. The initial investment required is $53,000 and the cost of capital is 8%. Expected cash flows over the next four years are given below. Years Cash Flow ($) 12,000 27.000 27,000 70,000 3.0 years 2.1 years 25 years 2.2 years 2.9 years

  • Instructions Question 1 1 pt (1) Refer to the Capital Budgeting Narrative. What is the NPV...

    Instructions Question 1 1 pt (1) Refer to the Capital Budgeting Narrative. What is the NPV of the project? Capital Budgeting cost of capital is 6%. Expected cash flows over the next four years are given below: Narrative: Carbon Design is considering a new project. The initial investment required is $80,000 and the Years Cash Flow (S) 7,000 48,000 4 359,000 40,000 $51,556 $48,523 $50,545 O $46,501

  • Question 3 1 pts (3) Refer to the Capital Budgeting Narrative. What is the Discounted Payback...

    Question 3 1 pts (3) Refer to the Capital Budgeting Narrative. What is the Discounted Payback Period of the project? Capital Budgeting Narrative: Doga Bank is considering a new project. The initial investment required is $46,000 and the cost of capital is 9%. Expected cash flows over the next four years are given below: Years Cash Flow (5) 6,000 30.000 14,000 70,000 3.1 years 2.7 years 2.3 years 2.2 years 3.0 years D Question 4 1 pts (4) Refer to...

  • 18) Refer to the Capital Budgeting Narrative. What is the Payback Period of the project? Capital...

    18) Refer to the Capital Budgeting Narrative. What is the Payback Period of the project? Capital Budgeting Narrative (Use the following information for questions referring to the narrative.: Gevrek Communications is considering a new project. The initial investment required is $85,103.35 and the cost of capital is 10%. Expected cash flows over the next four years are given below: Years Cash Flow ($) 1 14,000 2 35,000 3 42,000 4 40,000 3.2 years 3.4 years 2.9 years 2.3 years 2.5...

  • Question 5 1 pts (5) Refer to the Capital Budgeting Narrative. Assume that the firm has...

    Question 5 1 pts (5) Refer to the Capital Budgeting Narrative. Assume that the firm has a threshold of 2.6 years, Will the firm accept the project based on the PB method? Capital Budgeting Narrative: Doga Bank is considering a new project. The initial investment required is $67,000 and the cost of capital is 11%. Expected cash flows over the next four years are given below: Years Cash Flow (S) 7,000 22,000 25,000 80,000 The project will NOT be accepted...

  • x fx Capital Budgeting Capital Budgeting Wenling Consulting Services is considering an eight year investment in...

    x fx Capital Budgeting Capital Budgeting Wenling Consulting Services is considering an eight year investment in two projects, A and B. Both projects will have Initial outlay, $120,000, and the terminal cash flow, $11,000. The annual after-tax operating cash flows are as follo 1 $ 3 4 5 6 7 $ $ $ $ $ Project A 31,000.00 28,700.00 23,440.00 23,200.00 21,000.00 19,900.00 18,900.00 16,500.00 $ $ $ $ $ $ $ 5 Project B 19,000.00 19,500.00 22,700.00 24,300.00 27,000.00...

  • Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an...

    Suppose Pheasant Pharmaceuticals is evaluating a proposed capital budgeting project (project Beta) that will require an initial investment of $2,225,000. The project is expected to generate the following net cash flows: Year Year 1 Year 2 Year 3 Year 4 Cash Flow $325,000 $450,000 $500,000 $500,000 Pheasant Pharmaceuticals's weighted average cost of capital is 9%, and project Beta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's NPV? $1,417,225 O -$807,775...

  • Suppose Cold Goose Metal Works Inc. is evaluating a proposed capital budgeting project (project Alpha) that...

    Suppose Cold Goose Metal Works Inc. is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $500,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $275,000 Year 2 $500,000 Year 3 $450,000 Year 4 $475,000 Cold Goose Metal Works Inc.’s weighted average cost of capital is 10%, and project Alpha has the same risk as the firm’s average project. Based on the cash flows, what is...

  • Suppose Black Sheep Broadcasting Company is evaluating a proposed capital budgeting project (project Beta) that will...

    Suppose Black Sheep Broadcasting Company is evaluating a proposed capital budgeting project (project Beta) that will require an initial Investment of $3,000,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 Year 2 Year 3 Year 4 $325,000 $500,000 $475,000 $400,000 Black Sheep Broadcasting Company's weighted average cost of capital is 10%, and project Beta has the same risk as the firm's average project. Based on the cash flows, what is project Beta's...

  • Suppose Hungry Whale Electronics is evaluating a proposed capital budgeting project (project Alpha) that will require...

    Suppose Hungry Whale Electronics is evaluating a proposed capital budgeting project (project Alpha) that will require an initial investment of $400,000. The project is expected to generate the following net cash flows: Year Cash Flow Year 1 $375,000 Year 2 $450,000 Year 3 $450,000 Year 4 $450,000 Hungry Whale Electronics’s weighted average cost of capital is 8%, and project Alpha has the same risk as the firm’s average project. Based on the cash flows, what is project Alpha’s net present...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT