Cooper Electronics uses NPV profiles to visually evaluate competing projects. Key data for the two projects under consideration are given in the following table: Initial investment 28,000 24,000 Year Operating cash inflows 1 8,000 7,000 2 12,000 10,000 3 10,000 7,000 4 9,000 7,000 Terra Firma Initial Investment $28000 $24000 Year Cash Flows 1 $8000 $7000 2 $12000 $10000 3 $10000 $7000 4 $9000 $7000 Using these data, graph, on the same set of axes, the NPV profiles for each project using discount rates of 0%, 8%, and the IRR. The IRR of project Terra is 14.57% (Round to two decimal places.) The IRR of project Firma is 11.3%. (Round to two decimal places.) If the discount rate is 0%, the NPV of project Terra is $11000 (Round to the nearest cent.) If the discount rate is 0%, the NPV of project Firma is $7000. (Round to the nearest cent.) If the discount rate is 8%, the NPV of project Terra is $4249.06. (Round to the nearest cent.) If the discount rate is 8%, the NPV of project Firma is $1756.90. (Round to the nearest cent.) If the discount rate is the project's IRR, the NPV of project Terra is $______. (Round to the nearest cent.) If the discount rate is the project's IRR, the NPV of project Firma is $______. (Round to the nearest cent.)
Cooper Electronics uses NPV profiles to visually evaluate competing projects. Key data for the two projects under consideration are given in the following table: Initial investment 28,000 24,000 Year Operating cash inflows 1 8,000 7,000 2 12,000 10,000 3 10,000 7,000 4 9,000 7,000 Terra Firma Initial Investment $28000 $24000 Year Cash Flows 1 $8000 $7000 2 $12000 $10000 3 $10000 $7000 4 $9000 $7000 Using these data, graph, on the same set of axes, the NPV profiles for each project using discount rates of 0%, 8%, and the IRR. The IRR of project Terra is 14.57% (Round to two decimal places.) The IRR of project Firma is 11.3%. (Round to two decimal places.) If the discount rate is 0%, the NPV of project Terra is $11000 (Round to the nearest cent.) If the discount rate is 0%, the NPV of project Firma is $7000. (Round to the nearest cent.) If the discount rate is 8%, the NPV of project Terra is $4249.06. (Round to the nearest cent.) If the discount rate is 8%, the NPV of project Firma is $1756.90. (Round to the nearest cent.) If the discount rate is the project's IRR, the NPV of project Terra is $______. (Round to the nearest cent.) If the discount rate is the project's IRR, the NPV of project Firma is $______. (Round to the nearest cent.)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 13P
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Question
Cooper Electronics uses NPV profiles to visually evaluate competing
projects.
Key data for the two projects under consideration are given in the following table:
Initial investment 28,000 24,000
Year Operatingcash inflows
1 8,000 7,000
2 12,000 10,000
3 10,000 7,000
4 9,000 7,000
Year Operating
1 8,000 7,000
2 12,000 10,000
3 10,000 7,000
4 9,000 7,000
| Terra | Firma | |
| Initial Investment | $28000 | $24000 |
| Year | Cash |
Flows |
| 1 | $8000 | $7000 |
| 2 | $12000 | $10000 |
| 3 | $10000 | $7000 |
| 4 | $9000 | $7000 |
Using these data, graph, on the same set of axes, the NPV profiles for each project using discount rates of 0%, 8%, and the
The IRR of project Terra is 14.57% (Round to two decimal places.)
The IRR of project Firma is 11.3%. (Round to two decimal places.)
If the discount rate is 0%, the NPV of project Terra is $11000 (Round to the nearest cent.)
If the discount rate is 0%, the NPV of project Firma is $7000. (Round to the nearest cent.)
If the discount rate is 8%, the NPV of project Terra is $4249.06.
(Round to the nearest cent.)
(Round to the nearest cent.)
If the discount rate is 8%, the NPV of project Firma is
$1756.90. (Round to the nearest cent.)
If the discount rate is the project's IRR, the NPV of project Terra is
$______. (Round to the nearest cent.)
If the discount rate is the project's IRR, the NPV of project Firma is
$______. (Round to the nearest cent.)
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