Consider the following cash flow of a company: Year Cash flow -600 10 -5000 11-40 1000 a) Compute the IRR for this table b) At MARR 15% determine the acceptability of each project.
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- The following are the cash flows of two projects: Year 0 1 2 3 4 Project A $ (220) 100 100 100 100 Project B $ (220) 120 120 120 What are the internal rates of return on projects A and B? Note: Enter your answers as a percent rounded to 2 decimal places. Project A B IRR % %Spreadsheet Link What is the IRR of the following project?Cash FlowYear0 -32,0001. 9,0002. 10,0003. 15,0004. 7,800 1). 10.8% 2). 11.2% 3). 11.7%4). 12.0% 5). 12.3%A company has a project available with the following cash flows: Year 0 2234O 1 Cash Flow -$36,470 12,510 14,740 19,520 10,880 If the required return for the project is 7.7 percent, what is the project's NPV?
- The following are the cash flows of two projects: Project B Year Project A 0 $ (235) $ (235) 115 135 115 135 115 135 115 1234O 1 2 3 4 What are the internal rates of return on projects A and B? Note: Enter your answers as a percent rounded to 2 decimal places. Project A B IRR % %Complete the following 6 Wk 3 Financial Exercises: Problem Set 1, Part 2 problems: 1. Calculate the net present value (NPV) of the following cash flow stream if the required rate is 12%: Insert your NPV calculation. Year Cash Flow Is this a good project for the business to accept? Explain why or why not. Insert your answer. 2. Calculate the NPV of the following cash flow projections based on a required rate of 10.5%: Insert your NPV calculation. Year Cash Flow Is this a good project for the business to accept? Explain why or why not. Insert your answer. 3. A company needs to decide if it will move forward with 2 new products that it is evaluating. The 2 initiatives have the following cash flow projections: Project A Project B Year Cash Flow Year Cash Flow Based on the risk of each project, the company has a required rate of return of 11% for Project A and 11.5% for Project B. The company has a $1.5 million budget to spend on new projects for the year. Should the company move forward…ed Your company has a project available with the following cash flows: Year Cash Flow 0 -$80,900 12345 21,600 25,200 31,000 26,100 20,000 If the required return is 15 percent, should the project be accepted based on the IRR?
- ok ht ences A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year 0 1 2 3 Cash Flow IRR -$27,400 11,400 14,400 10,400 If the required return is 16 percent, what is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) % Should the firm accept the project? Yes O NoCalculating IRR Compute the internal rate of return for the cash flows of the following two projects: Year Project A Project B 0 -$7,300 -$4,390 1 3, 940 2,170 2 3,450 2,210 3 2,480 1,7301. Consider the following investment projects: Year(n) Net cash flow Project 1 -$1,200 Project 2 -$2,000 1 600 1,500 2 1,000 1,500 IRR 19.65% 17.53% Determine the range of MARR for which Project 2 would be preferred over Project 1
- 3. Compute for the following: Required: Payback period, payback reciprocal, accounting rate of return, Net present value and profitability index Total investment. P 200,000 Cost of capital 10% Net income P 15,000 for 8 years P 80,000 Cash inflowTask 2A business has two projects to invest in, as follows:Create a new spread sheet, calculate NPV for the following projects at discount rates of 3% and 7%, respectively, by creating a dynamic process. Project 1 Project 2Year Cash inflows Cash outflows Cash inflows Cash outflows0 0.00 70,000.00 0.00 70,000.001 24,000.00 13,000.00 25,000.00 15,000.002 22,000.00 1,000.00 25,000.00 03 25,000.00 0 20,000.00 04 25,000.00 0 43,000.00 21,000.005 17,500.00 7,500.00 20,000.00 5,000.00 P1: NPV P2: NPVThen, a) by using a built-in/Excel function, calculate the NPV for each project with discount rates of 3% and 7%, respectively;b) By comparing the NPVs at the rate of…Consider the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) -$ 15,456 5,225 8,223 13,013 8,705 0 1 234 -$ 276,363 26,400 51,000 57,000 402,000 Whichever project you choose, if any, you require a 6 percent return on your investment. a. What is the payback period for Project A? Payback period b. What is the payback period for Project B? Payback period c. What is the discounted payback period for Project A? Discounted payback period