Forrzano plc is considering a new investment and has produced the following NPV figures at two discount rates: Discount rates NPV (£000) 8% 200 16% (80) What is the approximate IRR of the project? (round two 2 d.p.) A 13.71% B 10.29% C 11.71% D 12.29%
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- Dinaro Inc. is looking at an investment project that has an NPV of ($5,000). The hurdle rate is 8%.Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ product s revenue/ product v0 (150,000) outlay (150000) outlay1 14000 150002 24000 253333 44000 520004 84000 63333 Calculate NPV of both products (to 1 d.p.) assuming a discount rate of 7%. Then decide which product should be selected and why ?
- Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ product s revenue/ product v0 (150,000) outlay (150000) outlay1 14000 150002 24000 253333 44000 520004 84000 63333 Calculate NPV of both products (to 1 d.p.) assuming a discount rate of 7%The Weiland Computer Corporation is trying to choose between the following mutually exclusive design projects, P1 and P2:Year 0123 Cash flows (P1) -$53,000 27,000 27,000 27,000 Cash flow (P2) -$16,000 9,100 9,100 9,100a. If the discount rate is 10 percent and the company applies the profitability index (PI) decision rule, which project should the firm accept?b. If the firm applies the Net Present Value (NPV) decision rule, which project should it take?c. Are your answers in (a) and (b) different? Explain why?• Sienna plc has deduced the net present value of a potential investment project at two discount rates. The relevant data are as follows: Discount rate 20% 30% NPV (£000) 60 (120) What is the approximate internal rate of return of the project? A 16.7% B 23.3% C 26.6% D 33.3%
- Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ product s revenue/ product v0 (150,000) outlay (150000) outlay1 14000 150002 24000 253333 44000 520004 84000 63333 Calculate the IRR for Product V only using 1% and 17% to 2 d.p.Suppose the following two independent investment opportunities are available to Fitz, Inc. The appropriate discount rate is 8 percent. Year Project Alpha Project Beta 0 −$5,500 −$7,100 1 2,800 1,600 2 2,700 5,500 3 1,700 4,500 a. Compute the profitability index for each of the two projects. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.) b. Which project(s), if either, should the company accept based on the profitability index rule? multiple choice Neither project Project Beta Both projects Project AlphaA potential project provides the following: Initial Investment = 36,101 Annual cash Flows = 12,101 period= 5 years What is the discount rate If NPV = 0? Answer in the format: #0.00 Answer as a percentage but without the % sign Example 0 0651 is entered as 6.51 Do not round intermediary calculations. Use full precision of your calculator or Excel. Do not include commas or dollar signs. Round properly to two decimal places Example: .157835 would be .16 Example: 2.3491 would be entered 2.35 HINT: Be sure your answer is percentage
- Nautilus Company is going to make an investment of $700,000 in a machine and the following are the cash flows that two different products would bring in years one through four. The company's required rate of return is 12%. Option A Option B $245,000 $225,000 $195,000 $275,000 $295,000 $250,000 $245,000 $225,000 Using the appropriate EXCEL spreadsheet in the Chapter11 NPV IRR Analysis.xlsx download, answer the following questions: What is the NPV for Option A? What is the NPV for Option B? What is the IRR for Option A? What is the IRR for Option B? PLEASE NOTE #1: The dollar amounts will be with "$" and commas as needed and rounded to two decimal places (i.e. $12,345.67). Round your IRR answers, in percentage format, to two decimal places (i.e. 12.34%). 5. Given the above answers, which project should the company invest in? Project . PLEASE NOTE #2: Your answer is either "A" or "B" - capital letter, no quotes.Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project? Year0 ($11,368,000)1 $2,112,5892 $3,787,5523 $3,300,6504 $4,115,8995. $ 4,556,424 Round to two decimal places. For year 0 , its initial investment .Raysut cement has taken up a new project with an initial investment of 125000 OMR.The expected future cashflow from the project over the next three years will be 57000 OMR, 55000 OMR and 65000 OMR.What is the profitability index if the discount rate is 15 percent? Select one: a. 1.04 b. 1.23 c. 1.12 d. None of these e. 1.07