Calculate the payback period for project

Assignment Help Finance Basics
Reference no: EM133119579

Consider the following independent projects:

 

Cash Flow ($)

Project 

C0

C1

C2 

C3

C4

C5

A

-1,000

1,000

0

0

0

0

B

-2,000

1,000

1,000

1,000

0

0

C

-3,000

1,000

1,000

0

1,000

1,000

a. If the opportunity cost of capital is 8%, calculate the net present value (NPV) of each project.  

b. Based on the NPV calculated in a), which project (s) should a firm accept? Why?

c. Calculate the payback period for each project.

d. Which project(s) would a firm using only the payback rule accept if the cutoff period is three years? 

Reference no: EM133119579

Questions Cloud

Should the machine be purchased : The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $637,000. Should the machine be purchased
How many beers will samantha have to sell to break-even : She can buy Corona for $24/case and Heineken for $36/case. How many beers will Samantha have to sell to break-even? How many of each type of beer
Support new children adjustment : Describe three things you plan to do in your preschool classroom to support new children's adjustment and the adjustment of their parents,
Calculate the division of profit to each partner : H. Mills $73,300 (Cr.) and S. Stone $48,200 (Cr.). Any remainder is shared equally. Calculate the division of profit to each partner
Calculate the payback period for project : a. If the opportunity cost of capital is 8%, calculate the net present value (NPV) of each project.
Health and physical development : You are a physical education teacher of third grade students at an urban public school. Aware of the lack of physical activity among many American children
Estimates the current asset value of peepswurk : PeepsWurk has a single zero coupon bond outstanding with face value of $10 billion due one year from now. The current yield on the bond is 10% (with continuous-
What is the current yield of the bond : Given that the price of the bond is $1110.62, what is the current yield of the bond? Enter your answer as a percentage. Do not include the percentage sign in yo
Support social change and social functioning : Identify and analyze the community resources and forces within your field placement that impede or support social change and social functioning.

Reviews

Write a Review

Finance Basics Questions & Answers

  How much should the firm charge per calculator

Samuelson, Inc., has just purchased a $660,000 machine to produce calculators. The machine will be fully depreciated by the straight-line method over.

  Reaction to intel announcement

Discuss whether the analysts following Intel appear to have been influenced by any psychological phenomena, both generally and in their reaction to Intel's announcement in September 2000.

  Calculate the return on equity for regrets only dating

Given the following information, calculate the return on equity for Regrets Only Dating

  Show decision is irrelevant in world of frictionless market

Show that the decision is irrelevant in a world of frictionless markets. What happens if a personal income tax of 15 percent on dividends (but not capital gains) is introduced into the model?

  Which option will reduce annual income taxes

You are in the 25% marginal tax bracket. You have the option of deducting $2,000 as an "adjustment to income" on the front page of Form 1040.

  Determine weighted cost of capital

Determine Weighted Cost of Capital (WACC) using market value as well book value using following data(2.28)

  What are three risks that may affect future exchange rates

The company is Intel. After researching where does Intel does business, share which 2-4 countries are the most important to the business.

  Find out the current value of the bond if present market

twin oaks health center has a bond issue outstanding with a coupon rate of 7 percent and four years remaining until

  Conduct a complete bond refunding analysis

Conduct a complete bond refunding analysis. What is the bond refunding's NPV? Do not round intermediate calculations.

  What is the yield on a 1-year t-bill

An analyst evaluating securities has obtained the following information. The real rate of interest is 2.6% and is expected to remain constant for the next 5 yea

  Hire a non-pregnant person for the position

You are entitled to fire Michelle and hire a non-pregnant person for the position.

  Find the unlevered cost of capital for dell and hp

Find the unlevered cost of capital for Dell and HP. Assume that HP's debt-to-equity ratio will stay constant forever.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd