Determine the net present value

Assignment Help Financial Accounting

Reference no: EM1312260

Calculation of NPV and MIRR on a project.

Net Present Value

1.You have just paid $20 million in the secondary market for the winning Powerball lottery ticket. The prize is $2 million at the end of the year for the next 25 years. If your required rate of return is 8 percent, what is the net present value (NPV) of the deal?

Modified Internal Rate of Return

2. What is the modified internal rate of return (MIRR) of the Powerball deal in Question 1?

Calculate NPV

Your Firm's cost of capital is 10%. What is the Net Present Value of each investment proposal described in 1 above? Using the Net Present Value Method as the selection criteria, which project would you select?

Reference no: EM1312260

Questions Cloud

Cellular respiration and process of photosynthesis of plants : Explaining the cellular respiration and therocess of photosynthesis of plants.

Explaining difference in variances and decision rule : At α = .05, is there a difference in variances? Illustrate all steps clearly, including the illustration of the decision rule.

One hour to talk with only one person : If Latanya plans to use the phone for one hour to talk with only one person, with whom would she rather speak.

Probability-commercial success : What is the probability that none are a commercial success?

Determine the net present value : Determine the Net Present Value of each investment proposal described in 1 above? Using the Net Present Value Method as the selection criteria, which project would you select?

Greater productive efficiency than the china : The United States can make certain toys with greater productive efficiency than can the China. Yet we import those toys from China.

Find the correction of journal entry for bond interest : Find the Correction of journal entry for bond interest payment and this includes a brokerage commission of $1,250

Quality parameters-procedure of digital medical image. : Explain the quality parameters of the medical image quality. Explain the procedure of the digital medical image.

Johannas marginal cost is constant : Line segments will automatically connect the points. Remember to plot from left to right also plot among integers.

User Account

All Pages