Project based on the net present value

Assignment Help Finance Basics
Reference no: EM132199943

Evaluating the project based on the following:

Initial Investment:     $1,250,000

Cash Flows:              $275,000 per year for 5 years (end of year)

Required Return:    10%

Required Payback:  5 Years

1. Would you accept or reject the project based on the Net Present Value (NPV)?

2. Would you accept or reject the project based on the Payback Period?

3. Would you accept or reject the project based on the Discounted Payback Period?

4. Based on your answers to Questions 1-3, would you accept or reject the project? Why?

Reference no: EM132199943

Questions Cloud

Optimum capital structure : Assuming this as the optimum capital structure, the value of the firm is?
Amount of interest on the debt : If the interest rate on debt is 7 percent and 9 percent for the 30 percent and the 50 percent debt ratios, respectively, the amount of interest on the debt
What is the required amount of payment : If he can earn 6% interest annually, what is the required amount of each payment?
Children of incapacitated elderly parents : What interventions are available for children of incapacitated elderly parents ?
Project based on the net present value : 1. Would you accept or reject the project based on the Net Present Value (NPV)? 2. Would you accept or reject the project based on the Payback Period?
What is the firm after tax cost of debt : 1. What is the firm's after tax cost of debt? N = 12 PV = -1060 FV = 1000 PMT = 105 Tax Rate= 35% After Rd = =NPV
Privately owned companies than publicly traded : Why is it more difficult to value privately owned companies than publicly traded? Give specific examples.
About three mergers and acquisitions or divestitures : About 3 mergers, acquisitions, or divestitures and analyze them according to what we've discussed in this week's material.
Thinking of making changes : Alpha Tires is thinking of making changes in its cash only policy for sales. These are the numbers they think will be made from the changes

Reviews

Write a Review

Finance Basics Questions & Answers

  What amount of the note payable should l include

What amount of the note payable should L include in the current liabilities section of its December 31, 2013, balance sheet?

  What is cash conversion efficiency

A company had sales of $450,000 over the last quarter (90 days) and ending a/r of $275,000. If the company's terms are net 45.

  What should company a bond be selling

ABC Corp. has a bond outstanding that pays a 7% coupon. The interest is paid semiannually, and the bond matures in 10 years. If the market rate of interest.

  What is the cash flow under the current capital structure

Allison, a shareholder of the firm, owns 200 shares of stock. What is her cash flow under the current capital structure, assuming the firm has a dividend payout

  Trump steps up threats against harley-davidson

Trump Steps Up Threats Against Harley-Davidson: Is this just the first of many companies to ramp up overseas production

  Calculate the wacc above the re break point

XYX corporation's capital structure calls for 60% debt and 40% common equity. The company's cost of debt is 8%. Retained earnings are estimated to be $160 million. The company's cost of retained earnings is 14% and the cost of external common equ..

  Forward and future contracts

Mike Lane will have $5 million to invest in five year U.S. Treasury bonds three months from now. Describe what action lane should take using five-year U.S. Treasury note futures contracts to protect against declining interest rates.

  How would you rank the bonds from the shortest to longest

consider the following bondsbond numbermaturity yrs coupon rate frequency yield annual11061621062631001641061559616how

  How might southern california edison use electricity

This assignment is about weather derivatives. Please post answers to the three questions in the space that'll open up once you click "Create Journal Entry". How might Southern California Edison use electricity futures or options to protect or impr..

  Protect embryonic and vulnerable industries

What would be suggestions given to countries wanting to protect embryonic and vulnerable industries, or those central to national security?

  Evaluating the project payback

Project L costs $60,000, its expected cash inflows are $14,000 per year for 11 years, and its WACC is 11%. What is the project's payback?

  Should fresh farming lease the tractors

Fresh Farming Company is negotiating a lease for five new tractors with Leasing International. The terms of the lease offered by Leasing International call.

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