3. Calculate the NPV at a cost of capital of 9% and the IRR for a project with an initial outlay of $69,724 and an inflow of $15,000 followed by four consecutive inflows of $17,000 at one-year intervals.
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- 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?For a project with an initial investment of $30,000 and cash inflows of $12,000 a year for three years, calculate NPV given a required return (I/Y) of 3.65%. Select one: a. $1,265 b. $3,524 c. $4,839 d. $730b) Following data relate to five independent investment projects : Initial Outlay Projects P ORST 1,000,000 240,000 184,000 11,500 80,000 Annual Cash Inflows Life in Years 250,000 24,000 30,000 4,000 12,000 8 15 20 5 10 Page 2 of 3 Assume a 10% required rate of return and a 50% tax rate. Rank these five investment projects according to each of the following criteria: (i) Pay-back Period. (ii) Accounting Rate of Return. (iii) Net Present Value Index. (iv) Internal Rate of Return.
- 4. Consider the investment projects given in the following table. n 0 1 2 Project 1 - $1,500 $700 $2,500 Net Cash Flow Project 2 - $5,000 $7,500 $600 Project 3 -$2,200 $1,600 $2,000 Assume that MARR=15% and a financing rate of 12%. a. Compute the IRR for each project. b. On the basis of the IRR criterion, if the three projects are mutually exclusive investments, which project should be selected?Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows of $9,550 per year for 8 years, and a cost of capital of 9.35%. Round your answer to two decimal places. For example, if your answer is $345.667 round as 345.67 and if your answer is .05718 or 5.718% round as 5.72. A. 15.64% B. 14.90% C. 13.70% D. 14.75% E. 11.17%6) A project has an initial cost of $45,000, expected net cash inflows of $10,000 per year for 8 years, and a cost of capital of 12%. What is the project's IRR? Round your answer to two decimal places. %
- What is NPV for a project with the following cash flows: an initial cash out of $35,400 followed by inflows of $6,500 for three years and then a single inflow in the fourth year of $18,000 at a cost of capital of 9%? $7,001.94 -$6,450.33 $-6,500.13 $-6,194.93 $-6,895.16The capital cost of a certain project is $625,000 and the annual expenses are $33,000. If the study period is 11 years, what is the present worth of this investment assuming 7.25% interest rate? O a. -$380,596 O b. -$244,404 O c. $380,596 O d. -$869,404 O e. $869,404A project has cash flows of -$152,000, $60,800, $62,300, and $75,000 for Years 0 to 3, respectively. The required rate of return is 13 percent. Based on the internal rate of return of percen
- Please use the following table to answer subsequent questions. Assume 7% cost of capital for both projects. (Numbers in parenthesis means outflow). Year Cash flow for Project X Cash flow for Project Y 0 ($32,000) ($32,000) 1 23,000 33,000 2 44,000 (44,000) 3 (27,000) 52,000 What is the MIRR’s for project Y? Only input the percentage value with 2 decimal places, NO % sign please.You are given the following cash flows for a project. Assuming a cost of capital of 12.84 percent. determine the profitability index for this project. Year 0 1 2 3 4 5 O 14981 O 1.68/7 O1.7508 1.6245 1.5613 Cash Flow -$1,115.00 $554.00 $622.00 $648 00 $426.00 $216.00A project has an initial capital outlay of Kshs.150,000 and unequal net cash-flows of Kshs 100,0000 in year one, Kshs 80,000 in year two, Kshs 70,000 in year three, Kshs 60,000 in year four, Kshs 50,000 in year five and a Kshs. 30,000 residual values at the end of its life in year six. REQUIRED i. Calculate the Accounting Rate of Return ii. Calculate the Internal Rate of Return iii. From your studies, what is the importance of Internal Rate of Return?