A project that will provde annual cash flows of $3,000 for nine years costs $10,000 today. a. At a required return of 10 percent, what is the NPV of the project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. At a required return of 28 percent, what is the NPV of the project? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. At what discount rate would you be indifferent between accepting the project and rejecting it? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. NPV b. NPV c. Discount rate %

A project that will provde annual cash flows of $3,000 for nine years costs $10,000 today. a. At a required return of 10 percent, what is the NPV of the project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. At a required return of 28 percent, what is the NPV of the project? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. At what discount rate would you be indifferent between accepting the project and rejecting it? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. NPV b. NPV c. Discount rate %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A project that will provde annual cash flows of $3,050 for nine years costs $10,200 today. a. At a required return of 11 percent, what is the NPV of the project? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. b. At a required return of 27 percent, what is the NPV of the project? Note: A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. c. At what discount rate would you be indifferent between accepting the project and rejecting it? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. NPV b. NPV c. Discount rate %
You are evaluating a project that costs $69,000 today. The project has an inflow of $148,000 in one year and an outflow of $59,000 in two years. What are the IRRs for the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) What discount rate results in the maximum NPV for this project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Assume an investment has cash flows of −$25,200, $7,000, $8,000, $8,500, and $9,000 for Years 0 to 4, respectively. What is the NPV if the required return is 11.1 percent? (do not round intermediate calculations, enter negative number with a minus sign and round your answer to 2 decimal places, e.g., -32.16.) Should the project be accepted or rejected?
A project that provides annual cash flows of $16,800 for nine years costs $74,000 today. What is the NPV for the project if the required return is 8 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places, e.g., 32.16.) NPV At a required return of 8 percent, should the firm accept this project? Аcсept Reject What is the NPv for the project if the required return is 20 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV
Assume an investment has cash flows of -$25,200, $7,000, $8,000, $8,500, and $9,000 for Years 0 to 4, respectively. What is the NPV if the required return is 11.1 percent? decimal places, e.g., -32.16.) Should the project be accepted or rejected? (do not round intermediate calculations, enter negative number with a minus sign and round your answer to 2 (write either "accepted" or "rejected")
Assume an investment has cash flows of -$25, 200, $7,000, $8,000, $8,500, and $9,000 for Years 0 to 4, respectively. What is the NPV if the required return is 12 percent? (do not round intermediate calculations, enter negative number with a minus sign and round your answer to 2 decimal places, e.g., -32.16.) Should the project be accepted or rejected? (write either "accepted" or "rejected")
A firm evaluates all of its projects by applying the NPV decision rule. A project under consideration has the following cash flows: Year Cash Flow -$ 41,000 20,000 23,000 14,000 1 What is the NPV of the project if the required return is 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPV At a required return of 11 percent, should the firm accept this project? O Yes O No
An investment has an installed cost of $532,800. The cash flows over the four-year life of the investment are projected to be $216,850, $233,450, $200,110, and $148,820, respectively. a. If the discount rate is zero, what is the NPV? (Do not round intermediate calculations.) b. If the discount rate is infinite, what is the NPV? (A negative answer should be indicated by a minus sign.) c. At what discount rate is the NPV just equal to zero? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. NPV b. NPV c. IRR Q % l
An investment has an installed cost of $537,800. The cash flows over the four-year life of the investment are projected to be $212,750, $229,350, $196,010, and $144,720, respectively. a. If the discount rate is zero, what is the NPV? (Do not round intermediate calculations.) b. If the discount rate is infinite, what is the NPV? (A negative answer should be indicated by a minus sign.) c. At what discount rate is the NPV just equal to zero? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. NPV b. NPV c. IRR %
You are evaluating a project that costs $79,000 today. The project has an inflow of $168,000 in one year and an outflow of $69,000 in two years. What are the IRRs for the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Smallest Largest IRR IRR % % What discount rate results in the maximum NPV for this project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
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You are evaluating a project that costs $64,000 today. The project has an inflow of $138,000 in one year and an outflow of $54,000 in two years. What are the IRRs for the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Smallest IRR Largest IRR What discount rate results in the maximum NPV for this project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % % %

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