User Account

All Pages

Indifferent between accepting the project and rejecting

Assignment Help Finance Basics
Reference no: EM132185315

A project that provides annual cash flows of $15,000 for nine years costs $67,000 today. What is the NPV if the required return is 8 percent? What if it's 20 percent? At what discount rate would you be indifferent between accepting the project and rejecting it?

Annual cash flows     $                     15,400

# of years                                                  9

Costs                          $                    67,000

Required Return                                        8%

Required Return                                      20%

Complete the following analysis. Do not hard code values in your calculations. You must use the built-in Excel function to answer this question.

NPV at 8 percent

NPV at 20 percent

IRR

Reference no: EM132185315

Questions Cloud

Explore what this means for consumers : Create a video on the given topic, so no need of the references, In your video, explore what this means for consumers
Initial fixed asset investment : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.9 million.
How can you avoid making the visual misleading : What are your most important considerations when you are composing a data visualization. List at least 3 considerations.
Create a hierarchy of given topics : Create a hierarchy of no more or no less than five (5) of the most important topics that you believe that a one-day course entitled "Advanced Computer.
Indifferent between accepting the project and rejecting : What is the NPV if the required return is 8 percent? What if it's 20 percent? At what discount rate would you be indifferent between accepting the project
Market value of the equity of thompson : The market value of the equity of Thompson, Inc. is $610,000. The balance sheet shows $39,000 in cash and $204,000 in debt, while the income statement has EBIT
Explore why normal people do this : Watch people in the video "follow the herd" and not challenge the price point, Explore why normal people do this
What are reasonable values for the project costs : What are reasonable values for the project costs of capital for lower-risk, average-risk, and higher-risk projects?
Please calculate the wacc : Based on the above information, please calculate the WACC. Please show all the calculations by which you came up with the final answer.

Reviews

Write a Review

Finance Basics Questions & Answers

  Computation of cost of sales

Computation of Cost of sales at given level of finished inventory - If the company transferred $222,000 of completed goods from work in process to finished goods inventory during September, what was the cost of goods sold for the month?

  Governmental fund statements

Suppose that a government will collect its sales taxes in sufficient time to satisfy available criterion, it would ordinarily recognize revenue from sales taxes in,

  Would your answer change if the inability

Would your answer change if the inability to meet private sector customer demand reduces sales of 50,000 during this (ignore any effects beyond this period)?

  Determining the yield to? maturity-abner? corporation

Abner? Corporation's bonds mature in 16 years and pay 12 percent interest annually. If you purchase the bonds for ?$1,150?, what is your yield to? maturity?

  What is the project discounted payback

What is the project's discounted payback? Round your answer to two decimal places.

  Calculate the markup and the selling price for the chairs

Sit Well Corporation manufactured and sold 25,000 chairs this year. Total cost to manufacture per unit was $180. Sit well earned a 25% return on its investment of $6 million. Calculate the markup and the selling price for the chairs.

  You invested 2800 in a mutual fund five years ago the

1.you invested 2800 in a mutual fund five years ago. the return on your mutual fund has been 7.4 per year. how much is

  Payback period as investment selection criterion

Explain NPV, IRR, Profitability Index, and Payback period as investment selection criterion. What are the benefits and drawbacks of each?

  Calculate solars return on assets

Solar Corporation earned a 4% profit margin on sales of $30 billion, turned over its assets 6 times, had a current ratio of 3.4, an EPS of $4.25, and a return on equity of 15%. Calculate Solar's return on assets. Analyze your results.

  What interest rate would be indifferent to a lottery payout

What interest rate would be indifferent to a lottery payout today of $3,330,143.22, or equal annual end of the year payouts of $300,000? Please show detailed calculation for your answer.

  Relative inflation rates in the united states and australia

Exchange Rates. The exchange rate for the Australian dollar is currently A$1.40. This exchange rate is expected to rise by 10 percent over the next year.

  Discuss the food purchase expense and interest expense

Using ‘T-accounts', record debit and credit entries for each of the following transactions that all occurred in January 20X1 for a San Francisco restaurant.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd