Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN: 9781337902571
Author: Eugene F. Brigham, Joel F. Houston
Publisher: Cengage Learning
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Question
Chapter 11, Problem 5P
Summary Introduction
To calculate: The discounted payback period for the given project.
Introduction:
Discounted Payback Period:
It refers to the time period that a project takes to repay the amount invested with some returns attached to it and it is after considering the
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Chapter 11 Solutions
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Ch. 11 - How are project classifications used in the...Ch. 11 - Prob. 2QCh. 11 - Why is the NFV of a relatively long-term project...Ch. 11 - Prob. 4QCh. 11 - If two mutually exclusive projects were being...Ch. 11 - Discuss the following statement: If a firm has...Ch. 11 - Prob. 7QCh. 11 - Project X is very risky and has an NPV of 3...Ch. 11 - Prob. 9QCh. 11 - A firm has a 100 million capital budget. It is...
Ch. 11 - NPV Project L costs 65,000, its expected cash...Ch. 11 - IRR Refer to problem 11-1. What is the projects...Ch. 11 - MIRR Refer to problem 11-1. What is the projects...Ch. 11 - PAYBACK PERIOD Refer to problem 11-1. What is the...Ch. 11 - Prob. 5PCh. 11 - NPV Your division is considering two projects with...Ch. 11 - CAPITAL BUDGETING CRITERIA A firm with a 14% WACC...Ch. 11 - CAPITAL BUDGETING CRITERIA: ETHICAL CONSIDERATIONS...Ch. 11 - Prob. 9PCh. 11 - CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE...Ch. 11 - CAPITAL BUDGETING CRITERIA: MUTUALLY EXCLUSIVE...Ch. 11 - Prob. 12PCh. 11 - MIRR A firm is considering two mutually exclusive...Ch. 11 - CHOOSING MANDATORY PROJECTS ON THE BASIS OF LEAST...Ch. 11 - Prob. 15PCh. 11 - Prob. 16PCh. 11 - CAPITAL BUDGETING CRITERIA A company has an 11%...Ch. 11 - Prob. 18PCh. 11 - Prob. 19PCh. 11 - Prob. 20PCh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - CAPITAL BUDGETING CRITERIA Your division is...Ch. 11 - BASICS OF CAPITAL BUDGETING You recently went to...
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Similar questions
a) Calculate the discounted payback period for the project.
b) Calculate the Net Present Value of the project.
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How the regular payback periods and discounted payback periods for projects are calculated, after calculating NPV, IRR and MIRR
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Calculate the Rate of Return of the project. Explain, how and why?
Rate of interest = 10%
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Using image:
a-1. What is the payback period for each project
a-2. If you apply the payback criterion, which investment will you choose?
b-1. What is the discounted payback period for each project?
b-2. If you apply the discounted payback criterion, which investment will you choose?
c-1. What is the NPV for each project?
c-2. If you apply the NPV criterion, which investment will you choose?
d-1. What is the IRR for each project?
d-2. If you apply the IRR criterion, which investment will you choose?
e-1. What is the profitability index for each project?
e-2. If you apply the profitability index criterion, which investment will you choose?
f. Based on your answers in (a) through (e), which project will you finally choose?
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Using discount rate 20% the project should be rejected or accepted
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When does the project reach the payback point?
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Use the graph below to answer the following two statements. (2)
Â
Project _________ has the higher IRR.
At a discount rate of rate 10%, project _________ should be chosen.
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What is the discount rate for year 2? ____________
What is the NPV of all costs for year 1? ____________________
What is the NPV of benefits for year 2? _________________
What is the NPV of benefits for year 5? _________________
What is the NPV of all costs in year 5? ___________________
What is the TOTAL NPV of benefits? __________________
What is the TOTAL NPV of all costs? ____________________
What is the OVERALL NPV? _________________________
What is the ROI? ____________________________________
When does the project break-even? _____________________
What is the break-even fraction? _______________________
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a. Compute annual rate of return, Pay back period
b NPV using 14% discounts rate , Is the Project acceptable using this discount rate
 Compute NPV using 11% discounts rate. Is the Project acceptable using this discount rate
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