Q7 - Consider the following project:Year Cash Flow0– $3,024 1 17,172 2– 36,420 3 34,200 4– 12,000 a) Determine the IRR (s) for this project.b) At which rates of return will the project be acceptable? 7) Consider the following project:YearCash Flow- $3,02417,172- 36,42034,200- 12,00012a) Determine the IRR (s) for this project.b) At which rates of return will the project be acceptable?

Given information: Year Cash Flow 0 -3,024 1 17,172 2 -36,420 3 34,200 4 -12,000

Q7 - Consider the following project: Year Cash Flow 0 – $ 3,024 1 17,172 2 – 36,420 3 34,200 4 – 12,000 a) Determine the IRR (s) for this project. b) At which rates of return will the project be acceptable?

Q7 - Consider the following project: Year Cash Flow 0 – $ 3,024 1 17,172 2 – 36,420 3 34,200 4 – 12,000 a) Determine the IRR (s) for this project. b) At which rates of return will the project be acceptable?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 1P

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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

Q7 -

Consider the following project:

Year	Cash Flow
0	– $	3,024
1		17,172
2	–	36,420
3		34,200
4	–	12,000

a) Determine the IRR (s) for this project.
b) At which rates of return will the project be acceptable?

7) Consider the following project:
Year
Cash Flow
- $3,024
17,172
- 36,420
34,200
- 12,000
1
2
a) Determine the IRR (s) for this project.
b) At which rates of return will the project be acceptable?

Definition Definition Discount rate of a project wherein its net present value equals zero. Internal rate of return equates the present value of future cash flows with the initial investments. Internal rate of return helps to determine nominal cash flows.

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