Project annual modified internal rate of return

Assignment Help Financial Management
Reference no: EM131609586

A project requires an investment of $10,000 today and it will generate after-tax cash flows of $3,000 at the end of year 1, $5,000 at the end of year 2, and $8,000 at the end of year 3. The company’s weighted average cost of capital is 12.6% per year. What is the project’s annual modified internal rate of return?

Reference no: EM131609586

Questions Cloud

Compute the return firm should earn given its level of risk : Compute the return the firm should earn given its level of risk and determine whether the manager is saying the firm is undervalued or overvalued.
What is the project equivalent annual annuity : If the company’s weighted average cost of capital is 10.4% per year, what is the project’s equivalent annual annuity?
What is the project expected operating cash flow : A project is expected to generate earnings before interest, taxes, depreciation and amortization of $435,725. What is project’s expected operating cash flow?
Project expected net operating profit after taxes : what is the project’s expected net operating profit after taxes for the year?
Project annual modified internal rate of return : What is the project’s annual modified internal rate of return?
Present value and future value are crucial components : Present Value (PV) and Future Value (FV) are crucial components in the everyday financial decision-making in the managerial environment.
Resulting NPV to Drug Revolution under the base case : what is the resulting NPV to Drug Revolution under the base case scenario?
What is the present value of the project costs : A company’s weighted average cost of capital is 9.6% per year. What is the present value of the project’s costs?
Requires investment-what is the project payback period : A project requires an investment of $120,000 today, The company’s weighted average cost of capital is 10.2% per year. What is the project’s payback period?

Reviews

Write a Review

Financial Management Questions & Answers

  What is the liquidity premium of the corporate bond

A treasury bond that matures in 10 years has a yield of 3.3%. A 10-year corporate bond has a yield of 7% and a default risk premium of 2%. What is the liquidity premium of the corporate bond?

  Sales goes to pay for interest expense

Bethesda Water Company Income Statement for 2016 Sales $80,005 Cost of Goods Sold $55,124 Depreciation $15,000 EBIT $9,881 Interest Expense $7,900 EBT $1,981 Taxes $626 Net Income $1,355 Approximately ______ of each $1.00 in sales goes to pay for int..

  Ability of the company to rise prices-introduce innovations

When an asset manager is also the custodian of the clients funds, there is less risk of unethical behaviior, because the clients have more privacy. One possible reason why a reputational loss translates into a lsoi in the market value of a company is..

  Question 1you are considering investing in facial

question 1you are considering investing in facial laboratories. suppose facial is currently undergoing expansion and is

  What do market signaling studies

Faro techologies has 400 million shares outstanding trading at $5 a share.The company announces its intention to raise $200 million by selling new shares. What do market signaling studies suggest will happen to Faro's stock Price on the announcement ..

  What must the risk-free rate be

A stock has an expected return of 11.5 percent, its beta is 1.65, and the expected return on the market is 9.2 percent. What must the risk-free rate be?

  What is expected rate of return on this stock

You recently purchased a stock that is expected to earn 25% in a booming economy, 9% in a normal economy and lose 8% in a recessionary economy. There is a 15% probability of a boom, a 65% chance of a normal economy, and a 10% chance of a recession. W..

  What will cash flows for this project be

If your cost of capital is 10 percent and your firm faces a 34 percent tax rate, what will the cash flows for this project be?

  What is payback period of project with average cash outflows

What is the payback period of a project with average cash outflows of $8,000, average annual cash inflows of $10,000, and an initial investment of $13,000? The payback period is how many years?

  Conjunction with capital structure policy

Should dividend policy be established independently of or in conjunction with capital structure policy? If capital structure is then changed might this affect dividend policy?

  Increased by advertising adjusting entry-cash from operation

At the end of the quarter, a company did an adjusting entry to record the fact that $1,000 of Prepaid Advertising had been used up during the quarter. Which of the following items would be increased by this advertising adjusting entry? Cash from Oper..

  Cash-accounts payable and accounts receivable

You are given the balance sheet and sales information for Hoffmeister Industries: Cash ? Accounts payable? Accounts receivable? Long-term debt 120,000 Inventories ? Common stock ? Fixed assets ? Retained earnings 195,000 Total assets $600,000 Total l..

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