Compute the irr for project

Assignment Help Portfolio Management
Reference no: EM13212474

Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows:
Year
0 Cash Flow -$39,000,000
1 Cash Flow $63,000,000
2 Cash Flow -$12,000,000

a. If the company requires a 12 percent return on its investments, should it accept this project? Why?

b. Compute the IRR for this project. How many IRRs are there? Using the IRR decision rule, should the company accept the project? What's going on here?

Reference no: EM13212474

Questions Cloud

Find the temperature of source and sink : a heat engine working on carnot cycle converts 25% of heat into work when the temperature of the sink is reduced by 353 k the efficiency gets doubled .find the temperature of source and sink.
Discuss how the strategies are applied : Describe three that you think are the most important, and discuss how the strategies are applied and describe three that you think are the most important and discuss how the strategies are applied.
Calculate the time rate of change : Calculate the time rate of change dHB/dt of angular momentum about point B when the particle passes the bottom of the guide at C.
What is the probability that attendance is greater : The attendance at baseball games at a certain stadium is normally distributed, with a mean of 44,000 and a standard deviation of 2500. For any given game: a) What is the probability that attendance is greater than 46,000 b) What is the probability ..
Compute the irr for project : Compute the IRR for this project. How many IRRs are there? Using the IRR decision rule, should the company accept the project? What's going on here?
By what percentage did gdp decline in the fourth quarter : According to the News on page 162 : Economy: Sharpest Decline in 26 Years The U.S. economy suffered its biggest slowdown in 26 years in the last three months of 2008, according to the government's first reading about the fourth quarter released Fr..
Sketch the t-s diagram for the cycle : Sketch the T-s diagram for the cycle (put labels and appropriate information)
What is lowest amount of money that you would accepting : Imagine that you face the following choice. You can accept a guaranteed loss of $750 or accept a stylized risk. The outcome of the stylized risk is determined by the toss of a fair coin. If heads comes up, you lose $525.
What interpretation would you give to the exponent for r : an estimate of the demand function for household furniture produced the folloing results: F= 0.0036Y1.08RR0.16p-0.48 r(2)=0.996 where F= furniture expenditures per household Y = disposible personal income per household R = value of private residen..

Reviews

Write a Review

Portfolio Management Questions & Answers

  Portfolio analysis

The stock with the lowest beta (0.76) is Apple Inc. stock. The stock with the highest beta (3.29) is Facebook Inc. stock. Beta for Apple Inc. stock is less that 1, it tells us that stock price is less volatile and risky than mark..

  Provide investment portfolio advice

Provide investment portfolio advice and management to a client.

  Evaluate total number of shares

EBV proposes to structure the investment as 5m shares of CP with FV of $5m, one-to one conversion to common, and no dividends. Total Valuation Estimated from Newco.

  Role of the imf and world bank

Economic and territorial logic of empire are not always aligned. Explain his argument in light of the role of the IMF and World Bank as forms of neo imperialism.

  Prepare a portfolio of stocks

Prepare a portfolio of stocks

  Which critically examines the benefits and risks to company

Which critically examines the benefits and risks to a company, of incorporating corporate debt into a portfolio of equity and debt.

  Compute the variance-covariance matrix

Compute the sample mean, variance, and standard deviation of these shares and compute the variance-covariance matrix V and Plot the daily share prices and daily returns for each individual asset.

  Net nominal rate of interest and net real rate of interest

What bank portfolio can guarantee the rate of return 1 to all type 1 people and the rate of return 1.2 to all type 2 people? How many goods are placed in storage? In capital?

  Right issue to improve financial status

If you are the CEO of a British company that now faces the loss of a lucrative contract in Malaysia because of the dispute. What action should you take and How do you think British government should respond to the Malaysian action?

  Calculate the cost of reinvested profits

Calculate the cost of reinvested profits and the cost of new common shares using the constant-growth DVM - Cost of reinvested profits versus new common shares-DVM

  Calculate the after-tax cost of debt

Cost of debt For each of the following bonds, calculate the after-tax cost of debt. Assume the coupons are paid semi-annually, that the tax rate is 40 percent, and that we are dealing with $1,000 of par value.

  Calculate the overall cost of capital for cartwell products

Calculate the overall cost of capital for Cartwell Products. Which projects should the firm select? Does your answer differ from your answer topart d? If so, explain why.

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