Homework Answers
Since payback period = 2.5 years,
Initial Investment = 275,000+400,000+475,000/2
= $912,500
NPV = Present value of cash inflows – Present value of cash outflows
= 275,000/(1.10) + 400,000/(1.10)2 + 475,000/(1.10)3 + 475,000/(1.10)4 – 912,500
= $349,384.43
i.e. $349,384
The payback period does not take into account the time value of money
It does not take entire life into account
Add Answer to:
7.The NPV and payback period What Information does the payback period provide? Suppose you are evaluating a projec...
7. The NPV and payback period What information does the payback period provide? Suppose you are...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $275,000 Year 2 $450,000 Year 3 $400,000 Year 4 $400,000 If...
7. The NPV and payback period What information does the payback period provide? Suppose you are...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $375,000 Year 2 Year 3 Year 4 $475,000 $475,000 $475,000 If...
6. The NPV and payback period What information does the payback period provide? Suppose you are...
6. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 Year 2 Year 3 $275,000 $425,000 $400,000 $425,000 Year 4 If...
7. The NPV and payback period What information does the payback period provide? Suppose you are...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Year 1 Year 2 Year 3 Year 4 Cash Flow $350,000 $450,000 $475,000 $450,000 If...
7. The NPV and payback period What information does the payback period provide? Suppose you are...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years Year Cash Flow $325,000 Year 1 Year 2 $400,000 Year 3 $425,000 Year 4 $500,000 If...
7. The NPV and payback period What information does the payback period provide? Suppose you are...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years Year Cash Flow Year 1 $325,000 Year 2 $400,000 Year 3 $425,000 $500,000 Year 4 If...
5. The NPV and payback period What information does the payback period provide? Suppose you are...
5. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $350,000 Year 2 $475,000 Year 3 $400,000 Year 4 $475,000 If...
The NPV and payback period What information does the payback period provide? Suppose you are evaluating...
The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project’s net present value (NPV). You don’t know the project’s initial cost, but you do know the project’s regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $325,000 Year 2 $450,000 Year 3 $450,000 Year 4 $475,000 If the...
5. The NPV and payback period What Information does the payback period provide? Suppose you are...
5. The NPV and payback period What Information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's not present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years Year Cash Flow Year 1 $375,000 Year 1425.000 Year 3 Year 4 $450,000 $500,000 If the...
What information does the payback period provide? Suppose you are evaluating a project with the expected...
What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Year 1 Year 2 Year 3 Year 4 Cash Flow $300,000 $450,000 $400,000 $450,000 If the project's weighted average cost of...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $275,000 Year 2 $450,000 Year 3 $400,000 Year 4 $400,000 If...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 $375,000 Year 2 Year 3 Year 4 $475,000 $475,000 $475,000 If...
6. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Cash Flow Year 1 Year 2 Year 3 $275,000 $425,000 $400,000 $425,000 Year 4 If...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Year 1 Year 2 Year 3 Year 4 Cash Flow $350,000 $450,000 $475,000 $450,000 If...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years Year Cash Flow $325,000 Year 1 Year 2 $400,000 Year 3 $425,000 Year 4 $500,000 If...
7. The NPV and payback period What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years Year Cash Flow Year 1 $325,000 Year 2 $400,000 Year 3 $425,000 $500,000 Year 4 If...
5. The NPV and payback period What Information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's not present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years Year Cash Flow Year 1 $375,000 Year 1425.000 Year 3 Year 4 $450,000 $500,000 If the...
What information does the payback period provide? Suppose you are evaluating a project with the expected future cash inflows shown in the following table. Your boss has asked you to calculate the project's net present value (NPV). You don't know the project's initial cost, but you do know the project's regular, or conventional, payback period is 2.50 years. Year Year 1 Year 2 Year 3 Year 4 Cash Flow $300,000 $450,000 $400,000 $450,000 If the project's weighted average cost of...
Most questions answered within 3 hours.
-
3. Gains from trade
Consider two neighbouring island countries called Euphoria and
Contente. They each have...
asked 19 minutes ago -
A business executive has the option to invest money in two
plans: Plan A guarantees that...
asked 2 hours ago -
Hello, can someone please help me answer this question?
How much heat is absorbed by a...
asked 2 hours ago -
. A marketing researcher conducted a survey of 25 shoppers
randomly selected at the local mall...
asked 2 hours ago -
Create an comprehensive response to the
following:
Antimicrobial agents work on a multitude of microbes (bacteria,...
asked 2 hours ago -
6.13 LAB: Step counter. Section 6.3.
A pedometer treats walking 2,000 steps as walking 1 mile....
asked 2 hours ago -
(14.2) A block of mass m = 10 kg riding on a frictionless
horizontal plane is...
asked 2 hours ago -
Use any search engine to search for articles about Starbucks
partnership with Tata Companies in India...
asked 2 hours ago -
Let’s say that for some reason Bank Excess Reserves suddenly
increase sharply. What effect would this...
asked 3 hours ago -
Given:
Curent Assets: $600,000
Total Assets: $2,600,000
Current Liabilities: $500,000
Total Liabilities: $1,700,000
What is the...
asked 3 hours ago -
1. What is a “Bankster”? What is insider trading? Why is it
illegal?
2. What is...
asked 3 hours ago -
A transverse wave on a cord is given by
D(x,t)=0.18sin(2.7x−61.0t), where Dand x are in m...
asked 3 hours ago