CONTEMP.FINANCIAL MGMT. (LL)-W/MINDTAP
14th Edition
ISBN: 9780357292877
Author: MOYER
Publisher: CENGAGE L
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Chapter 11, Problem 2P
Summary Introduction
To determine: The probability of the project having negative annual cash flow.
b)
Summary Introduction
To determine: The probability that annual cash flow will be greater than $575,000.
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A project has an expected net present value of $50,000 with a standard deviation of the net present value of $20,000. Assume that NPV is normally distributed.
What is the probability that the project will have a negative NPV?
A project has an expected NPV of $50,000 with a standard deviation of the NPV of $20,000. Assume that NPV is normally distributed. What is the probability that the project will have a net present value greater than $60,000?
a. What are the project’s annual net cash inflows?
b. What is the present value of the project’s annual net cash inflows? (Round your final answer to the nearest whole dollar amount.)
c. What is the project’s net present value? (Round final answer to the nearest whole dollar amount.)
d. What is the profitability index for this project? (Round your answer to 2 decimal places.)
e. What is the project’s internal rate of return? (Round your answer to nearest whole percent.)
Chapter 11 Solutions
CONTEMP.FINANCIAL MGMT. (LL)-W/MINDTAP
Ch. 11 - Prob. 1QTDCh. 11 - Prob. 2QTDCh. 11 - Prob. 3QTDCh. 11 - Prob. 4QTDCh. 11 - Prob. 5QTDCh. 11 - Prob. 6QTDCh. 11 - Prob. 7QTDCh. 11 - Prob. 8QTDCh. 11 - Prob. 9QTDCh. 11 - Prob. 10QTD
Ch. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Prob. 3PCh. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 9PCh. 11 - Prob. 10PCh. 11 - Prob. 11PCh. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Prob. 23PCh. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Prob. 28PCh. 11 - Prob. 29P
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- If the profitability index of a normal investment project is 0.5 and the initial investment required for the project is $ 2m, which of the below statements is incorrect? The project is worthwhile. The present value of cash inflows is $ 1m. The present value of cash inflows is $ 3m. The project has an NPV of $ 1m.arrow_forwardThe probability distribution of possible net present values for project X has an expected value of $20,000 and a standard deviation of $10,000. Assuming a normal distribution, calculate the probability that the net present value will be (i)zero or less, that (ii) it will be greater than $30,000, and that it will be less than $5,000.arrow_forwardAssume an investment has cash flows of -$25,200, $7,000, $8,000, $8,500, and $9,000 for Years 0 to 4, respectively. What is the NPV if the required return is 11.1 percent? decimal places, e.g., -32.16.) Should the project be accepted or rejected? (do not round intermediate calculations, enter negative number with a minus sign and round your answer to 2 (write either "accepted" or "rejected")arrow_forward
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