Objective type questions on payback period and npv and irr

Reference no: EM1314168

Objective type questions on payback period, NPV and IRR

Turnbull Corp. is in the process of constructing a new plant at a cost of $30 million. It expects the project to generate cash flows of $13,000,000, $23,000,000, and 29,000,000 over the next three years. The cost of capital is 20 percent.

1. What is the payback period for this project?

a. 1.7 years

b. 2.2 years

c. 1.2 years

d. 2.7 years

2. What is the net present value of this project? (Round to the nearest million dollars.)

a. $10 million

b. $12 million

c. $14 million

d. $16 million

3. What is the internal rate of return that Turnbull can earn on this project? (Round to the nearest percent.)

a. 41%

b. 42%

c. 43%

d. 44%

4. What is the MIRR on this project? (Round to the nearest percent.)

a. 36%

b. 37%

c. 38%

d. 39%

Reference no: EM1314168

Questions Cloud

Find the cost of common equity : Find the cost of common equity and its WACC and Cost of common equity and WACC - target capital structure of 40% debt and 60% common equity,

Find the firm''s cost of common equity : Find the firm's cost of common equity using the CAPM approach and what is your estimate of Carpetto's cost of common equity?

Common equity using the capm approach : what is its cost of common equity and what will be the firm's cost of common equity using the CAPM approach

Find the company''s cost of common equity : Find the company's cost of common equity if all of its equity comes from retained earnings and What would the cost of equity from new stock be?

Objective type questions on payback period and npv and irr : Objective type questions on payback period, NPV and IRR and What is the internal rate of return that Turnbull can earn on this project

Computation of selection of the project : Computation of selection of the project and evaluating two mutually exclusive projects and Costs and cash flows are given in the following table

Computation of net present value and cost and cash flows : Computation of Net present value and Cost and Cash flows are shown in the table

Use the gauss jordan : Use the Gauss Jordan method to solve the equation.

Substitution method for solving the equations : Substitution method for solving the equations

User Account

All Pages