Answered: Find the NPV for the following cash…

Find the NPV for the following cash flows assuming a WACC of 10%. YR CF 0 -15,000 1 6,000 2 4,000 3 2,000 4 3,000 5 2,000

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows

Section10.4: Internal Rate Of Return (irr)

Problem 2ST

See similar textbooks

Related questions

Q: Consider the following projects cash flows: End of Year (n) Project A Project B Project C Project D…

A: given, year A B C D 0 -1000 -3000 2000 -4000 1 200 2000 -600 -1000 2 500 2000 -600 6000…

Q: Consider the following cash flows: Year Cash Flow -$28,600 15,100 13,800 10,200 1 2 3 a. What is the…

A: profitability index is given by present value of cash flow to initial investment. Profitability…

Q: If the present value of future cash flows is $4,200 for an investment that requires an outlay of…

A: NPV = present value of cash inflows - the present value of cash outflows given that, present…

Q: Present Value Present Value of Net Cash of Net Cash Year Flows Flows $ (136,900) 44,545 40,494…

A: Break-Even Time: The period of time needed for a project to produce discounted cash flows that are…

Q: Consider the following projected cash flows in the indicated cells in Excel for years zero through…

A: We know, Net Present Value (NPV) is the difference between the present value of cash inflows and…

Q: Construct a NPV profile and determine EXACTLY how many non-negative IRRs you can find for the…

A: NPV means present value of profit generates from operations. In other words, difference between PV…

Q: Compute the NPV for Project X with the cash flows shown below if the appropriate cost of capital is…

A: Net Present value of a project is the sum of all the cash inflows and outflows.

Q: Blinding Light Co. has a project available with the following cash flows: Year Cash Flow 0…

A: IRR stands for Internal rate of return. It is the rate at which net present value of the project…

Q: 5. The management is evaluating an investment project, with the following cash flows: Period Cash…

A: To Find: NPV at 12% NPV at 16% IRR

Q: For the given cash flow if equivalent cash in equals equivalent cash out. Find the value of W, i-12%…

A: Notes: The question states that all equivalent cash inflows equal all equivalent cash outflows.…

Q: Calculate the future equivalent at the end of 2012, at 25% per year, of the following series of cash…

A: Interest rate (r) = 25% Cashflow in year 2008 (CF1) = $1000 CF2 = $1000 - $100 = $900 CF3 = $1000 -…

Q: Consider the two investments with the following sequences of cash flows. At Marr of 15%. What is the…

A: IRR refers to the annualized rate of return for a given project. Higher the IRR, better the…

Q: The following are the cash flows of two projects: Year Project A -$340 170 Project B -$340 240 170…

A: Net present value is the difference between the present value of cash in flows and present value of…

Q: a. What is the present value of the following set of cash flows, discounted at 10.6% per year?…

A: given information Year 1 2 3 4 5 CF $11 $21 $31 $41 $51 interest…

Q: Suppose we have a project with the following cash flows: Outgoing: P150,000 at t = 0, P250,000 at t…

A: IRR may be calculated using the following excel formula

Q: Cash Flow -$5,000 $6,250 -$6,000 $7,500 ΕΟΥ 3 Based on Norstrom's criterion, what can you say about…

A: The IRR is the rate at which the discounted value of the expected cash flows becomes equal to the…

Q: Find the present value of the following stream of cash flows, assuming that the firm’s required…

A: >Present value is the value of future value that can be earned today. >This can get…

Q: Consider an investment with the following cash flows: Year Cashflows PV of P 1 @ 14% 0 (P 31,000)…

A: Profitability index is calculated as: = Present value of future cash inflows / Initial investment

Q: Thorley Inc. is considering a project that has the following cash flow data. The project's IRR is…

A: IRR is the rate of return which makes project NPV equal to zero. formula: NPV=∑NCFN1+RN0=∑NCFN1+IRRN

Q: Given the following sensitivity analysis, which of the following statements is true?

A: While choosing which investment should be undertaken, different techniques are used. Techniques used…

Q: Filter Corp. has a project avallable with the following cash flows: Year Cash Flow -$13,800 6,700…

A: Information Year Cash flow 0 -13800 1 6700 2 8000 3 3900 4 3500

Q: Donald's Inc. is evaluating a project that has the following annual free cash flows: Period Free…

A: Project IRR = Cash inflow / cash outflow

Q: Filter Corp. has a project available with the following cash flows: Year Cash Flow -$16,200 5,600…

A: Year Cash flow 0 -16200 1 5600 2 6900 3 6300 4 4700

Q: - Suppose that the cash flows of two investments are as follows: Unit: S CASH FLOW AT YEAR YEAR: 2…

A: Solution : Computation of NPV Investment A Investment B Particulars Period PV Factor…

Q: ) For each of the following, determine the expected cash flows. Cash FlowEstimate…

A: Excel Spreadsheet: Excel Workings:

Q: PharmPic is considering the following project with the following cash flows:…

A: Cash flows for Pharmpic project: Cash flows for DosageDoc project To Find: Payback period…

Q: Consider the following information relating to the expected cash flows from two independent…

Q: How many possible IRRs could you find for the following set of cash flows? Time 0 1 2 3…

A: IRR is the rate at which NPV of the project is zero

Q: The Sloan Corporation is trying to choose between the following two mutually exclusive design…

A: The capital budgeting techniques include net present value where the company is selecting projects…

Q: Compute the NPV for Project X with the cash flows shown as follows if the appropriate cost of…

A: NPV can be calculated by following function in excel =NPV(rate,value1,[value2],…) + Initial…

Q: Consider the following cash flows of two mutually exclusive projects. Year Project A Cash Flow…

A: According to the rule, we will answer the first three subparts only, for the remaining subparts,…

Q: Project A has the following estimated cash flows and present values: Year…

A: Sensitivity analysis: Sensitivity analysis allows managers to make changes to any one of the factors…

Q: Compute the IRR from the following set of cash flows: Year Cash Flow 0 (1000) 1 400 2 400 3…

A: Formulas:

Q: UNEVEN CASH FLOW STREAM a. Find the present values of the following cash flow streams at…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: stment required ent value of cash inflows $13,000 $16,330 $61,000 $92,930 $106,000 $126,460…

A: The profitability index (PI) is a financial tool to measure the profitability of a proposed…

Q: How many IRRs could the following cash flows produce? YR CF 0 -200,000 1 -50,000 2…

A: IRR is internal rate of return. IRR is the discount rate at which the sum of present value of cash…

Q: What is the payback period for the following set of cash flows? (Round answer to two decomals, i.e.…

A: Payback period: It is the total time during which an investment's original investment is supposed to…

Q: Find the present value of the stream of cash flows shown in the follwing tables. Assume that the…

A: Opportunity cost = 15%

Q: Blinding Light Co. has a project available with the following cash flows: Year 1 2 3 4 5 Cash Flow…

A: Capital budgeting is a financial process for analyzing a capital investment project. It involves the…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Find the NPV for the following cash flows assuming a WACC of 10%.

YR	CF
0	-15,000
1	6,000
2	4,000
3	2,000
4	3,000
5	2,000

Definition Definition Calculation used to evaluate the investment and financing decisions that involve cash flows occurring over multiple periods. NPV is calculated as the difference between the present value of cash inflow and cash outflow. NPV is used for capital budgeting and investment planning as well as to compare similar investment alternatives.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Analysis

VIEW

Step 2 Calculation of NPV

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

ind the IRR for the following cash flows assuming a WACC of 10%. YR CF 0 -15,000 1 6,000 2 4,000 3 2,000 4 3,000 5 2,000
For the cash flows shown, determine: (a) the number of possible i* values (b) the i* value displayed by the IRR function (c) the external rate of return using the MIRR method if ii = 18% per year and ib = 10% per year. Year 0 1 2 3 4 Revenues, $ 0 25,000 19,000 4000 18,000 Costs, $ −6000 −30,000 −7000 −6000 −12,000
What is the payback period for the following set of cash flows? (Round answer to two decomals, i.e. 32.16) Period Cash Flow 0 -6700 1 2200 2 3800 3 1000 4 4000
A manufacturer projects the cash flows shown below. Determine the rate of return if the cash flows occur as projected. Year Cash Flow, $ 0 -733,000 1 -467,000 2 215,000 3 279,000 4 – 8 309,000
The following project has cash flows as follows: Year Project A 0 -$705,000 1 $225,000 2 $421,500 3 $275,000 What is the IRR?
Compute the NPV for Project X with the cash flows shown as follows if the appropriate cost of capital is 10% TIme 0 1 2 3 4 Cash flows -$100,000 $36,000 $200,000 $210,000 $10,000
What is the NPV of the following cash flows if the required rate of return is 0.09? Year 0 1 2 3 4 CF -6,816 3,577 3,505 2,732 3,757
22.Harry's Inc. is considering a project that has the following cash flow and WACC data. The project's NPV is $ _________. (Show 2 decimals.) WACC = 10.25% Year 0 1 2 3 4 Cash Flows -$1,000 $100 $450 $450 $350
Find teh present value of the streams of cash flows shown in the following table. Assume that the firms opportunity cost is 14% A: Year Cash Flow 1 -$2100 2 2900 3 4000 4 5900 5 8200 B: Year Cash Flow 1 $9000 2-5 $5000/yr 6 $7200 C: Year Cash Flow 1-5 $12000/yr 6-10 $8000/yr The presevent vaule of stream A, B, and C
What is the NPV of the following cash flows if the required rate of return is 0.09? Year 0 1 2 3 4 CF -3,935 687 1,937 3,189 968 Enter the answer with 2 decimals (e.g. 1000.23).
Find the present value of the stream of cash flows shown in the follwing tables. Assume that the firms opportunity cost is 15% A: Year Cash Flow 1 -$2000 2 $3000 3 $3900 4 $6100 5 $8100 B: Year Cash Flow 1 $11000 2-5 $5000/yr 6 $7000 C: Year Cash Flow 1-5 $12000/yr 6-10 $8100/yr
Anderson Systems is considering a project that has the following cash flow and WACC data. The project's NPV is $___________. Enter two decimals. WACC = 9% Year 0 1 2 3 Cash Flows -$1,000 $500 $500 500