Firm ABC is considering a project that has the following cash flow data. Which of the following is CORRECT assuming a discount rate of 10%? Year 0 1 2 3 4 5 Cash Flows -$9,500 $2,000 $2,025 $2,050 $2,075 $2,100 The IRR of the project is 2.57% O The NPV of the project is -1,588.07 The Payback Period of the project is 3.64 years. O The Profitability Index of the project is -0.88. The MIRR of the project is 7.93%

Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a net cash inflow one year from now of 810,000. Assume the cost of capital is 10 percent. Required: 1. Break the 810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?

Project S has a cost of $10,000 and is expected to produce benefits (cash flows) of $3,000 per year for 5 years. Project L costs $25,000 and is expected to produce cash flows of $7,400 per year for 5 years. Calculate the two projects’ NPVs, IRRs, MIRRs, and PIs, assuming a cost of capital of 12%. Which project would be selected, assuming they are mutually exclusive, using each ranking method? Which should actually be selected?

The Ulmer Uranium Company is deciding whether or not to open a strip mine whose net cost is $4.4 million. Net cash inflows are expected to be $27.7 million, all coming at the end of Year 1. The land must be returned to its natural state at a cost of $25 million, payable at the end of Year 2. Plot the project’s NPV profile. Should the project be accepted if r = 8%? If r = 14%? Explain your reasoning. Can you think of some other capital budgeting situations in which negative cash flows during or at the end of the project’s life might lead to multiple IRRs? What is the project’s MIRR at r = 8%? At r = 14%? Does the MIRR method lead to the same accept-reject decision as the NPV method?

Uroboros Inc. is considering a project that has the following cash flow data. Assuming a WACC of 10.0%, what is the project's discounted payback period? (Ch. 11) Year 0 1 2 3 Cash Flow -1,000 450 450 450 Group of answer choices 2.65 2.86 3.04 2.38 3.31

Calculate the net present value of the following project for discount rates of 10,20 and 40 percent. Based on the NPVs you obtain, under which discount rates do you accept this project? Show your calculations. Cash Flows ($) Year 1 -7000 Year 2 4000 Year 3 19,000 NPV formula: NPV=sum_(t=0)^(n)(EATCF)/((1+k)^(t)) dution:-

The cash flows associated with an investment project are as follows: Project Y (200 000) 100 000 Year 100 000 120 000 110 000 The discount rate is 8 percent. What's the discount payback period of the projects? (compile a spreadsheet) Calculate NPV, PI of a projects Calculate IRR of a projects Should the firm accept the project? a) b) c) d) 01234

Company Z is considering a project that has the following cash flow data. Assuming a WACC of 8.0%, what is the project's discounted payback period? Year 0 1 2 3 Cash Flow -900 425 425 425 Group of answer choices 3.08 2.61 2.42 2.78 2.18

Living Colour Co. has a project available with the following cash flows:  Year Cash Flow 0 −$35,070   1 7,970   2 9,570   3 13,560   4 15,610   5 10,340      If the required return for the project is 7.9 percent, what is the project's NPV?

Masulis Inc. is considering a project that has the following cash flow and WACC data. What is the project's discounted payback period? WACC: 10.00% Year 0 1 2 3 4 Cash flows -$750 $525 $485 $445 $405 2.44 years 1.68 years 1.80 years 1.99 years 2.22 years