Exclusive projects-compute the IRR for project

Assignment Help Financial Management
Reference no: EM13920049

Consider two mutually exclusive projects with the following cash flows: Project S is a 4 year project with initial (time 0) cash outflow of 3000 and time 1 through 4 cash inflows of 1500, 1200, 800 and 300 respectively. Project L is a 4 year project with initial (time 0) cash outflow of 3000 and time 1 through 4 cash inflows of 400, 900, 1300, and 1500 respectively. Assuming a 5% cost of capital, compute the IRR for project S.

Reference no: EM13920049

Questions Cloud

Relationship between risk and return : Compose a brief summary (3–5 paragraphs) on the relationship between risk and return. Identify the different types of risk and their potential effect on decision making.
Was the cash flow an operating investing or financing : Was the cash flow an operating, investing, or financing activity on First State Bank's 2013 statement of cash flows?
What is the terminal cash flow at the end of year : A firm is considering the acquisition of a new machine. The base price is $85,000 and it would cost $15,000 to install. The machine is MACRS 3 year class property and it will be sold after 3 years for $17,000. What is the terminal cash flow at the en..
Project should be chosen if the projects are independent : Consider two projects with the following cash flows: Project S is a 4 year project with initial (time 0) cash outflow of 3000 and time 1 through 4 cash inflows of 1500, 1200, 800 and 300 respectively. Project L is a 4 year project with initial (time ..
Exclusive projects-compute the IRR for project : Consider two mutually exclusive projects with the following cash flows: Project S is a 4 year project with initial (time 0) cash outflow of 3000 and time 1 through 4 cash inflows of 1500, 1200, 800 and 300 respectively. Project L is a 4 year project ..
Determine the percentage of assets that were provided : Determine the percentage of assets that were provided by retained earnings. How much cash is in the retained earnings account?
Develop an it risk assessment opinion : Develop an IT Risk Assessment opinion from both a bottom-up perspective of assessing controls, threats and vulnerabilities, and translate these findings into business risk language.
Consider two mutually exclusive projects with the cash flows : Consider two mutually exclusive projects with the following cash flows: Project S is a 4 year project with initial (time 0) cash outflow of 3000 and time 1 through 4 cash inflows of 1500, 1200, 800 and 300 respectively. Project L is a 4 year project ..
Resulting in a single free cash flow : Determine the IRR on the following projects: a. an initial outlay of $10,000 resulting in a single free cash flow of $1,844 after 11 years. b. an initial outlay of $10,000 resulting in a single free cash flow of $2,039 after 20 years. c. an initial o..

Reviews

Write a Review

Financial Management Questions & Answers

  Cost performance index times schedule performance index

Using the cumulative data from the IPMR below for WBS 1.1.5, calculate a formula-based estimate at completion (EAC) using the performance factor of cost performance index times schedule performance index, or CPI x SPI.

  Determine the forward exchange rate

Determine the US dollar forward price quote, determine the forward price for the same British bond in the UK in pounds and determine the forward exchange rate for 9 months.

  When social marginal benefit curve of reduction of pollution

When the social marginal benefit curve of reduction of pollution is locally flat, which of the following generally makes sense in the presence of uncertainty about costs of reduction? Which of the following are questions answered by public finance? W..

  Calculate her commission on the sale

Mary works as a full-service broker at a firm that charges $75 a trade plus 10 cents per share for the broker's services. Calculate her commission on the sale of 700 shares of stock at $26 per share.

  After tax cost of capital to walgreen for the bonds

The Walgreen Corporation is contemplating a new investment that it plans to finance using one-third debt. The firm can sell new $1000 par value bonds with a 15 year maturity at a price of $953 that carries a coupon interest rate of 12.6 percent that ..

  Evaluating proposed expansion-incremental free cash flow

Mersey Chemicals manufactures polypropylene that it ships to its customers via tank car. Currently, it plans to add two additional tank cars to its fleet four years from now. When evaluating the proposed expansion, what incremental free cash flows sh..

  Which is required rate of return expected by suppliers funds

The manager of Sensible Essentials conducted an excellent seminar explaining debt and equity financing and how firms should analyze their cost of capital. Nevertheless, the guidelines failed to fully demonstrate the essence of the cost of debt and eq..

  Calculate a table of interest rates based

Calculate a table of interest rates based on the following information: The pure interest rate is 1.6% Inflation expectations for year 1 = 3%, year 2 =3.5%, years 3-5 =5% The default risk is .1% for year one and increases by .2% over each year Liquid..

  Find the outstanding balance at the end of the first year

A loan of 100,000 has payments at the end of each month for 12 years. For the first 6 years the payments are Z each month, and for the final 6 years the payments are 2Z each month. Interest is at a nominal annual rate of 12% compounded monthly. Find ..

  Production opportunities? and risk? and inflation

What factors affect the cost of money? Use at least one outside source. You may form your own opinions as well but support them with research. I need examples to understand the four factors please.  Production Opportunities  - the returns available w..

  Using the yield curve to estimate future interest rates

Assume that the real risk-free rate is 2.1% and that the maturity risk premium is zero. Also assume that the 1-year Treasury bond yield is 6% and a 2-year bond yields 6.5%. Calculate the yield using a geometric average. What is the 1-year interest ra..

  Importing goods and maximizing value for shareholders

Felicia & Fred’s board has hired a new Chief Operating Officer (COO) to assist them in expanding their operations globally. A close friend of Fred’s from childhood, the new COO, has extensive experience in importing goods and maximizing value for sha..

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