Evaluate generation project with the cash flows

Assignment Help Financial Management

Reference no: EM131176507

Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow 0 –$43,000,000 1 67,500,000 2 –18,000,000 Required: (a) If the company requires a 11 percent return on its investments, what is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) NPV $ 3,201,607.01 (b) Compute the IRRs for this project. (Do not round intermediate calculations. Enter the positive value in the first answer box, and the negative value in the second answer box. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) Internal rate of return 22.93 % Internal rate of return %

Reference no: EM131176507

Questions Cloud

What must be expected growth rate of company dividends : Arts and Crafts, Inc., will pay a dividend of $7 per share in 1 year. It sells at $70 a share, and firms in the same industry provide an expected rate of return of 14%. What must be the expected growth rate of the company’s dividends?

Corporation is considering issuing long-term debt : A corporation is considering issuing long-term debt. the debt would have a 30 year maturity and a 10 percent coupon rate and annual payments. the bonds will be sold for $950. additionally, the firm would have to pay floatation costs of 5 percent. the..

According to the expectations hypothesis : According to the expectations hypothesis, what is the expected rate of interest on a 2-year zero coupon bond implied by the following term structure: A 1-year zero coupon bond has a yield to maturity of 2% and a 1 year loan starting 2 years from now ..

Goals for equilibrium inflation rates and employment growth : What are the Fed’s goals for equilibrium inflation rates and employment growth? What circumstances in the US and world economy suggest that a “dovish,”slow approach to raising money market rates is appropriate at this time?

Evaluate generation project with the cash flows : Howell Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow 0 –$43,000,000 1 67,500,000 2 –18,000,000. If the company requires a 11 percent return on its investments, what is the NPV of the project..

Fed fund target range as fed increases its fed funds target : The Fed has decided that a slow rise in the Federal funds rate is likely the correct approach to balancing risks of holding inflation to around 2% per year while maintaining enough growth in GDP and labor markets to achieve and stay at full employmen..

What you think will happen to the current prices of houses : Suppose the prospective buyers of houses become more optimistic about the future prices of houses while at the same time existing owners of houses become more pessimistic about the future prices of housing. Explain what you think will happen to the c..

User Account

All Pages