Charge Car P/L is considering a project to launch charging stations for electric cars around Australia. Theinitial investment is expected to be $100,000,000 and the term of the project is 6 years. The required rate ofreturn from the project is 14% p.a. The annual cash flows are outlined in the following table:End of yearYear 1Year 2Cash flow p.a. (Sm)2022Year 32530Year 4Year 5Year 63437Based on Charge Car's required rate of return would you recommend proceeding with thisinvestment? Present all calculations to support your answerirn inenth tha.b. Would you change your opinion if Charge Car's required rate of return increased to 16% pa? Presentall calculations to support your answer

Net Present Value is the difference between the present value of cash inflows and cash outflows. A…

Answered: Charge Car P/L is considering a project…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter11: Capital Budgeting And Risk

Section: Chapter Questions

Problem 26P

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Charge Car P/L is considering a project to launch charging stations for electric cars around Australia. The initial investment is expected to be $100,000,000 and the term of the project is 6 years. The required rate of return from the project is 14% p.a. The annual cash flows are outlined in the following table: End of year Year 1 Year 2 Year 3 Year 4 Cash flow p.a. (Sm) 20 22 25 Year 5 Year 6 30 34 37 Based on Charge Car's required rate of return would you recommend proceeding with this investment? Present all calculations to support your answer a. Would you change your opinion if Charge Car's required rate of return increased to 16% pa? Present all calculations to support your answer. b.
An investment project provides cash inflows of $740 per year for 9 years. What is the project payback period if the initial cost is $1,480? A. 2.00 years B. 2.02 years C. 1.90 years D. 1.94 years E. 2.04 years What is the project payback period if the initial cost is $4,958? A. 6.70 years B. 6.77 years C. 6.37 years D. 6.83 years E. 6.50 years What is the project payback period if the initial cost is $7,400? A. 3.01 years B. Never C. 4.95 years D. 5.25 years E. 1.35 years
The table bellow shows the cash flow for an engineering project, if the reinvestment rate of return e is 6% per year, the external rate of rate (EER) is EOY Cash flow $ 13000 14 2000 5 to 10 8000
The table bellow shows the cash flow for an engineering project, if the reinvestment rate of return e is 6% per year, the external rate of rate (EER) is : EOY Cash flow $ 13000 14 -2000 5 to 10 8000 Select one: O a 14.3% O b. 17.6% O G 7% O d. 20.1% O e. 10%
Boomerang Bungee Corp. is considering the following project. Determine the equal annual annuity for the project if the cost of capital is 14%. Initial Investment: $75,000 Year Cash Inflows 1 $30,000 2 $35,000 3 $40,000 a. $2,259.62 b. $4,355.25 c. $7,768.67 d. $5,527.89
The total investment required for a project are estimated at RO 100,000. The cash flows expected from the projects for the first five years are explained in the table below. Year Project A Year 1 20000 Year 2 30000 Year 3 35000 Year 4 40000 Year 5 25000 Calculate the payback period
Justine Global Info Tech records the following cash flows at the end of each year for a project. If the firm's discount rate is 11%, what is the PRESENT VALUE of the project? Year Cash Flow P794,633.00 2 P542,149.00 P836,200.00 4 P716,080.00 5 P520,354.00
Intro A project requires an initial investment of $77.4 million to buy new equipment, and will provide after-tax cash flows of $27 million per year for 4 years. Part 1 What is the project's internal rate of return? 3+ decimals Submit
ABC Ltd is considering undertaking a project, which will involve an initial outlay ofRs.3,00,000. The project has the following cash flows associated with it:‘000Year 1 cash inflows 100Year 2 cash inflows 150Year 3 cash inflows 200If a discount rate of 10% is used to calculate the NPV of the project, which of the followingstatements is correct? (Assume the cash flows arise at the end of each year.)A. The project will yield a positive NPV of Rs. 65.5k and have a payback period of 2 yearsand 3 monthsB. The project will yield a positive NPV of Rs. 65.5k and have a payback period of 2 yearsand 9 monthsC. The project will yield a positive NPV of Rs. 365.5k and have a payback period of 2 yearsand 3 monthsD. The project will yield a positive NPV of Rs. 365.5k and have a payback period of 2 yearsand 9 months
EV Hyper Chargers is considering a project with the following cash flows: Year O Year 1 Year 2 Year 3 Year 4 -$133 million $30 million $40 million $55 million $75 million The regular payback period for this project, in years, is 3.00 3.74 2.74 4.00 3.11
The total investment required for two projects are estimated at OMR100, 000. The cash flows expected from the two projects for the first four years are explained in the table below. Year Project A Year 1 18,000 Year 2 28,500 Year 3 42,000 Year 4 48,000 What will be pay back period? a. 2.63 b. All the options are wrong c. 2.86 d. 3.03 e. 3.23
ces An investment project provides cash inflows of $975 per year for eight years. a. What is the project payback period if the initial cost is $3,500? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the project payback period if the initial cost is $4,550? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the project payback period if the initial cost is $8,800? (Enter O if the project never pays back. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a. Payback period b. Payback period C. Payback period years years years

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