Participate in a project that produces the cash flows

Assignment Help Financial Management
Reference no: EM13881190

You have the chance to participate in a project that produces the following cash flows: Cash Flows, $ C0 C1 C2 +3,400 +5,600 –10,600 a. The internal rate of return is 12%. If the opportunity cost of capital is 14%, what is the NPV of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.)

NPV $

Reference no: EM13881190

Questions Cloud

Prepare the journal entries by nci industries : 1.At January 1, 2013, NCI Industries, Inc., was indebted to First Federal Bank under a $240,000, 10% unsecured note.
Who has no additional recordkeeping responsibilities : Collections received by check are received by the company receptionist, who has no additional recordkeeping responsibilities Collections received by check are immediately forwarded unopened to the accounting department.
Requires an initial fixed asset investment : Quad Enterprises is considering a new three-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be w..
What''s a diels-alder reaction please explain in the greates : What's a Diels-Alder reaction? Please explain in the greatest detail.
Participate in a project that produces the cash flows : You have the chance to participate in a project that produces the following cash flows: Cash Flows, $ C0 C1 C2 +3,400 +5,600 –10,600 a. The internal rate of return is 12%. If the opportunity cost of capital is 14%, what is the NPV of the project?
Calculate the frequency of the light emitted : Calculate the frequency of the light emitted when an electron in a hydrogen atom makes each of the following transitions. n=5 --> n=1 n=5 --> n=4
What is the market capitalization rate : Company Y does not plow back any earnings and is expected to produce a level dividend stream of $5.40 a share. If the current stock price is $40.40, what is the market capitalization rate?
Journal entry to record the purchase by broadcourt : 1.On January 1, 2013, Instaform, Inc., issued 10% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2032 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually.
Calculate the rate of return when futures price : uppose John short sells (=writes) Apple put option to Mary. Is this identical to John buying Apple call option from Mary? Please explain in detail why they are the same or different. A company enters into 5 long January futures contracts of wheat. Th..

Reviews

Write a Review

Financial Management Questions & Answers

  Exchange for a loan problem

You are offered $1000 (in nominal dollars) 6 years from now in exchange for a loan of $750 today. You expect inflation to run 3.3% per year, and your real hurdle rate is 5%. Should you make the loan? You have $1000 in an account that yields a nominal..

  Assume semi-annual payments-what is the yield to maturity

ABC Inc., has $1,000 face value bonds outstanding. These bonds mature in 3 years, and have a 6.5 percent coupon. The current price is quoted at 98.59 percent of par value. Assume semi-annual payments. What is the yield to maturity?

  What is the market value of the bond-use annual analysis

A 10-year bond pays 8% on a face value of $1,000. If similar bonds are currently yielding 10%, what is the market value of the bond?: Use annual analysis.

  Profitability ratios trading on the equity digital relay

profitability ratios trading on the equity. digital relay has both preferred and common stock outstanding. the

  Best classified as unsystematic risk

Which one of the following is best classified as unsystematic risk?

  Annual pretax cost savings

Purple Haze Machine Shop is considering a four-year project to improve its production efficiency. Buying a new machine press for $540,000 is estimated to result in $225,000 in annual pretax cost savings. The press falls in the MACRS five-year class, ..

  Residual cash-new issued equity would incur flotation cost

Calculate the wacc for PG given the following: the company has outstanding debt that matures in 20 years that has a coupon of 9%. It pays interest semi-annually and the bon% premium to par is 1214.59. For a reference 20 year treasuries are yielding 3..

  Purchased a call option contract

You have purchased a call option contract on Smith & Smith common stock. The option contract is for 100 shares. The option has an exercise price of $ 43.00 and S&S’s stock currently trades at $40.00. The option premium is quoted at $ 2.00. If the sto..

  Discuss some of the pros and cons of using debt

Discuss some of the pros and cons of using debt as a long-term source of capital funding for a company. Why does using an appropriate amount of debt increase the value of the firm"

  Workers themselves can invent labor-saving machinery

According to Smith, social harmony comes from economic exchanges in which people act.  Which one of the following is a role for government that Smith saw as essential? The division of labor tends to be greatest in less economically developed countrie..

  Sensitivity of bond prices to changes in interest rates

For a given coupon rate, the sensitivity of bond prices to changes in interest rates increases at an increasing rate as maturity increases. What are the duration and modified duration of a seven-year, 3.5 percent coupon rate, annual coupon payment, $..

  How much are the annual payments

John Doeber borrowed $160,000 to buy a house. His loan cost was 6% and he promised to repay the loan in 15 equal annual payments. How much are the annual payments?

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