Determine the internal rate of return? for the project

Assignment Help Financial Management
Reference no: EM131575624

Benson Designs has prepared the following estimates for a? long-term project it is considering. The initial investment is ?$36,150 and the project is expected to yield? after-tax cash inflows of ?$8,000 per year for 7years. The firm has a cost of capital of 8?%.

a. Determine the net present value? (NPV) for the project.

b. Determine the internal rate of return? (IRR) for the project.

c. Would you recommend that the firm accept or reject the? project?

Reference no: EM131575624

Questions Cloud

What will your rate of return : What will your rate of return be if you sell your shares one year from now for $37 a share?
What is the price of a treasury strips : What is the price of a Treasury STRIPS with a face value of $100 that matures in 11 years and has a yield to maturity of 9.5 percent?
Organization demonstrates commitment to integrity and values : COSO Framework Components and Principles #1 is “The organization demonstrates a commitment to integrity and values.”
Cash flows associated with the proposed replacement : Covol Industries is developing the relevant cash flows associated with the proposed replacement of an existing machine tool with a? new,
Determine the internal rate of return? for the project : Determine the net present value? (NPV) for the project. Determine the internal rate of return? (IRR) for the project.
Benefits of further education worth the associated costs : Are the benefits of further education worth the associated costs?
What is the price of treasury strips with a face value : What is the price of a Treasury STRIPS with a face value of $100 that matures in 11 years and has a yield to maturity of 9.5 percent?
Are benefits of further education worth associated? costs : Are the benefits of further education worth the associated? costs?
Adjustable-rate mortgage-what is monthly mortgage payment : A 30 year adjustable-rate mortgage (ARM) was taken with the initial terms: What is the monthly mortgage payment and how much would you owe after 60 payments?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the firms cash conversion cycle

Cash Conversion Cycle. Company X is concerned about managing cash efficiently. On the average, inventories have an ago of 90 days, and accounts receivable are collected in 60 days. What is the firms operating cycle? What is the firms cash convesion c..

  Equipment to produce specialized aluminum products

ALUM, Inc. uses high-tech equipment to produce specialized aluminum products for its customers. Each one of these machines costs $1,520,000 to purchase plus an additional $48,000 a year to operate. The machines have a five-year life after which they ..

  What types of industry and economic information

What types of industry and economic information should financial analysts have in order to assess and understand the performance of specific industries?

  The firms cash is considered to grow

Consider a firm that this year generated free cash flow of $150million. The firm's cash is considered to grow by 2% anually towards infinity. The WACC (discount rate) is 10%. Value the firm in the scenario above.

  Industrial-sized electrical devices-generators-alternators

The Electrotech Corporation manufactures two industrial-sized electrical devices: generators and alternators. Both of these products require wiring and testing during the assembly process. Each generator requires 2 hours of wiring and 1 hour of testi..

  Manage a risky portfolio with an expected rate of return

Assume that you manage a risky portfolio with an expected rate of return of 18% and a standard deviation of 34%. The T-bill rate is 5.5%. Your risky portfolio includes the following investments in the given proportions: Stock A 32 % Stock B 36 % Stoc..

  What if they are acting in the creditors best interests

What if they are acting in the creditors’ best interests?

  Bond-yield-plus-judgmental-risk-premium approach

what would be your estimate of rs using the over-own-bond-yield-plus-judgmental-risk-premium approach?

  The recent drop in the mortgage interest rates

Given the recent drop in the mortgage interest rates, you have decided to refinance your home. Exactly five years ago, you obtained a $150 000 30-year mortgage with a fixed rate of 10%.Today, you can get a 30 year loan for the outstanding loan balanc..

  New npv using variety of risk adjusted discount rates

The most recent example was the company decision whether to invest $50 Million in developing and implementing a new enterprise system to help manage resources and meet customer demand in the face of considerable technological and market uncertainty. ..

  What do you believe is a fair market price for the stock

Under these circumstances, would you purchase this stock? What do you believe is a fair market price for the stock?

  Dividends are anticipated-what is the required return

The next dividend payment by Mosby, Inc. will be $2.45 per share. The dividends are anticipated to maintain a 5.5 percent growth rate, forever. If the stock currently sells for $48.50 per share, what is the required return?

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