Problem 12-17 (Algo) Net present value and internal rate of return methods [LO12-4] The Hudson Corporation makes an investment of $57,640 that provides the following cash flow: Year 1 2 3 Cash Flow $ 29,000 29,000 8,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. What is the net present value at a discount rate of 3 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Net present value

Problem 12-17 (Algo) Net present value and internal rate of return methods [LO12-4] The Hudson Corporation makes an investment of $57,640 that provides the following cash flow: Year 1 2 3 Cash Flow $ 29,000 29,000 8,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. What is the net present value at a discount rate of 3 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Net present value

Fundamentals of Financial Management (MindTap Course List)

15th Edition

ISBN:9781337395250

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 17P: EQUIVALENT ANNUAL ANNUITY A firm has two mutually exclusive investment projects to evaluate. The...

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Brook Corporation’s free cash flow for the current year (FCF0) was $3.00 million. Its investors require a 13% rate of return on (WACC = 13%). What is the estimated value of operations if investors expect FCF to grow at a constant annual rate of (1) −5%, (2) 0%, (3) 5%, or (4) 10%?
EQUIVALENT ANNUAL ANNUITY A firm has two mutually exclusive investment projects to evaluate; both can be repeated indefinitely. The projects have the following cash flows: Time Cash Flow X Cash Flow Y 0 100,000 70,000 1 30,000 30,000 2 50,000 30,000 3 70,000 30,000 4 30,000 5 10,000 Projects X and Y are equally risky and may be repeated indefinitely. If the firms WACC is 12%, what is the EAA of the project that adds the most value to the firm? (Round your final answer to the nearest whole dollar.)
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6.Wainright Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $ 720 2 930 3 1,190 4 1,275 If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What is the present value at 18 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What is the present value at 24 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $
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Multiple choice: If on the fourth year the cash inflows is P120,000 which present value factor are you going to use to covert the inflows into the present value assuming that the cost of capital is 12%? • 3.03735• .071178• 0.79719• 0.63552
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Assuming a 1-year, money market account investment at 5.315.31 percent (APY), a 3.413.41 percent inflation rate, a 2828 percent marginal tax bracket, and a constant $70 comma 00070,000 balance, calculate the after-tax rate of return, the real rate of return, and the total monetary return. What are the implications of this result for cash management decisions? Question content area bottom Part 1 Assuming a 1-year, money market account investment at 5.315.31% (APY), a 2828% marginal tax bracket, and a constant $ 70 comma 000$70,000 balance, the after-tax rate of return is enter your response here%. (Round to two decimal places.) Part 2 Assuming a 1-year, money market account investment at 5.315.31% (APY), a 2828% marginal tax bracket, and a constant $ 70 comma 000$70,000 balance, the after-tax monetary return is $enter your response here. (Round to the nearest dollar.) Part 3 Given an after-tax return of 3.823.82% and an inflation rate of…
MIRR [LO6”] Solo Corp. is evaluating a project with the following cash flows: Year Cash Flow 0 -$47,000 1 $16,900 2 $20,300 3 $25,800 4 $19,600 5 -$9,500 The company uses an interest rate of 10 percent on all of its projects. Calculate the MIRR of the project using all three methods.