No change to it throughout the project life

Assignment Help Marketing Management

Reference no: EM132049214

1. If net working capital is a cash outflow in period zero, and there is no change to it throughout the project life. How should we treat it in the terminal year?

A. We add it to the after tax salvage value, which yields the terminal cash flow.

B. We don't have to do anything with it since it takes care of itself.

C. We divide it by the number of periods, then add it to each period.

D. We subtract it from the after tax salvage value to find the terminal cash flow.

2. Project K costs $46,720.88, its expected cash inflows are $11,000 per year for 8 years, and its WACC is 12%. What is the project's IRR? Round your answer to two decimal places.

3. Project K costs $65,000, its expected cash inflows are $10,000 per year for 8 years, and its WACC is 10%. What is the project's MIRR? Round your answer to two decimal places.

Reference no: EM132049214

Questions Cloud

Same exercise price and expiration date : What is the value of a call option written on the stock with the same exercise price and expiration date as the put option?

Describes the ground rules applied in an effective team : Describes the ground rules applied in an effective team and describes the consequences of not utilizing ground rules for team effectiveness

Mountain company beta estimated : Treasury bills currently pay a return of 3%; the stock market return over the same period averaged 11%, and Mountain company's beta is estimated

Incorporating the effect of the opportunity cost : What is the new NPV of the project, after incorporating the effect of the opportunity cost?

No change to it throughout the project life : If net working capital is a cash outflow in period zero, and there is no change to it throughout the project life. How should we treat it in the terminal year?

Estimate how many deaths there are annually from tornado : Estimate how many deaths there are annually from tornado and drowning in the United States. Provide an actual number in your answer and explain how you came

Principle of corporate finance : If an investor's simple annual required rate of return is 12 percent with quarterly compounding, how much should the investor be willing to pay for this bond?

What is the equivalent annual cost of the tool : If the discount rate is 10% and the lathe will last for 5 years, what is the equivalent annual cost of the tool?

Identify characteristics of culture of the country : Identify characteristics of culture of the country in terms of: (a) language; (b) geographic condition; (c) religions; (d) cultural value, and (e) lifestyle.

User Account

All Pages