​(Calculating IRR,​ payback, and a missing cash​ flow)   The Merriweather Printing Company is trying to decide on the merits of constructing a new publishing facility. The project is expected to provide a series of positive cash flows for each of the next four years.   The estimated cash flows associated with this project are as​ follows:   Year Project Cash Flow   0     ?         1        ​$800,000 2   400,000 3   300,000 4   500,000   If you know that the project has a regular payback of 2.5 ​years, what is the​ project's IRR?   The IRR of the project is ( ? ) %.​ (Round to two decimal​ places.)

Question
​(Calculating IRR,​ payback, and a missing cash​ flow)
 
The Merriweather Printing Company is trying to decide on the merits of constructing a new publishing facility.
The project is expected to provide a series of positive cash flows for each of the next four years.
 
The estimated cash flows associated with this project are as​ follows:
 
Year
Project Cash Flow
 
0
    ?        
1
       ​$800,000
2
  400,000
3
  300,000
4
  500,000
 
If you know that the project has a regular payback of
2.5 ​years, what is the​ project's IRR?
 
The IRR of the project is ( ? ) %.​
(Round to two decimal​ places.)

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Finance

Other

Related Finance Q&A

Find answers to questions asked by students like you.

Q: You have assigned the following values to these three firms:    Price Upcoming Dividend Growth Be...

A: The formula to calculate required return using CAPM model is given below:

Q: Wildcat engineering decides to take a $10,000 interest only lona. The loan is to be paid montly over...

A: Interest only loan can be described as the loan on which borrower only pays the interest payments du...

Q: A 2-year Treasury security currently earns 1.77 percent. Over the next two years, the real risk-free...

A: Calculate the maturity risk premium as follows:

Q: Q1. Consider an all-equity firm that is contemplating going into debt. The market value of equity is...

A: Weighted average cost of capital (WACC) refers to the rate which a firm is expected to  pay to its s...

Q: 7 Bond A's is a 15 year bond with current price is $933 and it has an $80 annual coupon. Bond B's is...

A: a) Bond A has an annual coupon of $80, current price $933 and 15 years to maturity.Yield to maturity...

Q: Executives at XYZ Corporation realize that they have too much liquid assets. They want to use this c...

A: Calculate the expected return and standard deviation as follows:

Q: Which of the following are suppliers of loanable funds?     households     government units ...

A: First question:The suppliers of loanable finds include households, government units and foreign inve...

Q: A preferred stock pays a $4 dividend each quarter. Assuming an investor requires a 12% return on the...

A: Calculate the fair price as follows:

Q: A Forwand contracts have no defalt risk B Futures contracts roquire an initial margin requirement be...

A: In short position, for future contract if the price of the contract raises, the seller become obliga...

Q: The equity versus debt decision relies on a large number of factors such as the existing capital str...

A: As a rule, the superlative capital structure for a business is a capital structure which decreases t...

Q: H M 9Ro-a s re raa troese db ato a6411 6alo 5a,1908ecrcase 6. Lonnie needs extra money to buy a truc...

A: Calculate the interest amount as follows:

Q: Please show all equations and work as needed. Make the correct answer clear. If possible, please typ...

A:  As requested, I have typed the calculations for your convenience.The company sold 4 million of prim...

Q: A small company wants to invest in Project A or B. The cash flows for both are shown below. Determin...

A: Payback period and discounted payback periods are the methods to evaluate the profitability of a pro...

Q: In "Retail:  Discounters Get Their Day”, Business Week, January 14, 2002, the authors suggest that c...

A: Excessive Build-up of Inventory: When the inventory stocked or piled up in the store or company more...

Q: You are the CFO of Oriole, Inc., a retailer of the exercise machine Slimbody6 and related accessorie...

A: Incremental cash flow at the beginning of the project = -( initial investment in the store + initial...

Q: A trasury security in which periodoc coupon interest payments can be seperate from eachother ad from...

A: The appropriate answer is option (a).The Treasury STRIPS is known as Separate Trading of Registered ...

Q: The past five monthly returns for PG&E are −3.47 percent, 4.63 percent, 4.07 percent, 6.92 perce...

A: The returns for previous five months are -3.47%, 4.63%, 4.07%, 6.92% and 3.88%.

Q: Market Top Investors, Inc., is considering the purchase of a $365,000 computer with an economic life...

A: We will work out the cash fows year by year and the use the excel formula NPV to get the desired ans...

Q: 4. You plan to lease (Begin Mode!!!) a new care today. The dealership's finance office quotes you a ...

A: Calculation of interest rate and future value:Answer: Interest rate is 3% and future value is $19,93...

Q: Consider the following three bond quotes: a Treasury bond quoted at 103:17, a corporate bond quoted ...

A: Bonds are usually quoted as a percentage of its par value. Thus, to find the price of the bond follo...

Q: Company ABC decided to invest in a project that will earn an income of $25,000 in the first year of ...

A: Definition of Net present value:Net present value of a company is method which is used to find out t...

Q: A health insurance policy pays 65 percent of physical therapy cost after a $200 deductible. In contr...

A: ) If a person had 10 physical therapy sessions with $50 cost, then according to the health insurance...

Q: This year (10 years after you first took out the loan), you check your loan balance. Only part of yo...

A: Hi, there is some additional data missing the question. The total mortgage amount, interest rate, pr...

Q: Based on current dividend yields and expected capital gains, the expected rates or return on portfol...

A: Hence, sharpe ratio of A is 5.71% and is calculated by dividing the difference of anticipated expect...

Q: Camber Corporation has to decide if they can finance purchasing 10 new machines for all their manufa...

A: 1.The original cost per machine is $1,730,000 and the overall cost needed to buy 10 machines is as f...

Q: ​(IRR calculation)   Jella Cosmetics is considering a project that costs ​$800,000 and is expected t...

A: Calculation of IRR of the Project by using IRR function of excel:To open the "IRR function" window -...

Q: Anthony and Susan are married filing jointly. Their combined income is currently $98,000. Both have ...

A: Increment of 8,500 will push the taxable income to the level of = Old income + increment = 98,000 + ...

Q: Optimal corporation wants to expand their manufacturing facilities. They have two choices, first to ...

A: It is given that firm must incur $290,000 for two years, if it chooses option 1. The second option i...

Q: Given the following returns for Stock X and stock Y Stock X % return   Stock Y % return 2 ...

A: Calculate the variance and standard deviation as follows:

Q: I NEED PART 4 and MULTIPLE CHOICE PLEASE (BOLD PARTS AT THE END) Part 1: The CFO of Cruz, inc. is co...

A: PART 4Assumption:The computation of MIRR is based on the WACC rate at 12%

Q: 1H 3. Express the percent as a decimal. Coo 16.as%o 480% = LRo9u180 4.8 /00 4. As part of a fundrais...

A: Your answer to Q - 3 is correct. Hence, I am straightway moving to Q - 4.

Q: Try to calculate the effective interest rate for a $1789 simple discount note at 5.25% for 15 months...

A: Computation of the effective interest rate:Hence, the effective interest rate is 5.62%.

Q: Bob purchases 25,000 shares of common stock of Super Duper for $100,000. Exactly one year later when...

A: An investor can gain on assets when the current price of the asset exceeds the purchase price. This ...

Q: 6:04 IMG_0743.jpg X You are the CFO of Carla Vista, Inc., a retailer of the exercise machine Slimbod...

A: The initial investment cost of store is $33,500,000.According to straight line depreciation, the ann...

Q: A manager has determined that a potential new product can be sold at a price of $50 each. The cost t...

A: Selling Price = $50Variable Cost (Production Cost of Product) = $35Fixed Cost (Lease of necessary eq...

Q: I have 2 questions that I need help with.   1.Problem 8-15 Value of Dividends and Future Price (LG8-...

A: 1. Computation of value of stock:The value of the stock is $79.43. Excel spread sheet:

Q: 1. Acme Corp. just paid a dividend of $3.00 per share (ie., D0 = $3.00).  The dividend is expected t...

A: Hi there, As per Q&A guidelines, we should answer the first question when multiple questions pos...

Q: You are a management trainee in one of the Manufacturing companies based in Johor, Malaysia. The com...

A: As a management trainee, the answer for the CFO question will be that it is not easy to identify a d...

Q: At age 18, Susan did nothing. She waited until she was 28 to start depositing $2000 per year at the ...

A: Annuity, A = $ 2,000Interest rate, r = 12%Number of annuities = n = 65 - 28 = 37

Q: Consider a firm with an EBIT of $500,000. The firm finances its assets with $2,000,000 debt (costing...

A: Calculate the change in EPS as follows:

Q: You own a furniture manufacturing company. You are looking to expand into glass furniture and need t...

A: Calculation of ARR:The ARR for Machine 1 is 28.89% and Machine 2 is 32.73%.Excel Spreadsheet:

Q: The ___ the expected return from a financial asset, the ____ the risk of not getting the money back ...

A: Expected Return of Financial Asset:It is the expected profit or loss that is earned from the investm...

Q: 11. A company just paid a dividend of $4 and anticipates increasing its dividend at a constant rate ...

A: Calculate the required rate of return as follows:

Q: Executives at Microsoft are interested to get into the drone delivery business. Since it would take ...

A: We need to use the concept of time value of money to solve the question. According to the concept of...

Q: This question is related to Chapter 18 of Berk & Demarzo "Capital Budgeting and Valuation with L...

A: With constant debt-equity ratioAdjusted Present Value is used to value a firm’s total investment by ...

Q: need help

A: Under two factor model:E(R) = Rf + B1 x (RF1 - Rf) + B2 x (RF2 - Rf) whereRf = Risk free rate; B1 an...

Q: The private firm TranspCom needs to invest $300 million to a freeway construction and management pro...

A: Calculation of present worth of all potential investments:Answer:The present worth of all these pote...

Q: Brandt Corporation's 30-year bond has 10 years left until maturity. The 8% coupon bond has a par val...

A: Part 1:We calculate the current yield by dividing the coupon payment by current price of the bond.

Q: I still can't figure this question out. Is there anyone else that can look at it?

A: As a first step we need to calculate the missing APR in the table.Assuming half yearly coupn payment...