Project with the estimated cash flows

Assignment Help Financial Management

Reference no: EM132039040

1. A colleague asks for your help in finding the discount rate where the NPV=0 for a set of cash flows. You quickly recall that this is the IRR for a project. Answer in %, rounding to 2 decimals.

Year 0 cash flow = -118,000

Year 1 cash flow = 43,000

Year 2 cash flow = 37,000

Year 3 cash flow = 45,000

Year 4 cash flow = 39,000

2. Your firm has limited capital to invest and is therefore interested in comparing projects based on the profitability index (PI), as well as other measures. What is the PI of the project with the estimated cash flows below? The required rate of return is 19.9%. Round to 3 decimals.

Year 0 cash flow = -890,000

Year 1 cash flow = -110,000

Year 2 cash flow = 350,000

Year 3 cash flow = 520,000

Year 4 cash flow = 540,000

Year 5 cash flow = 420,000

Reference no: EM132039040

Questions Cloud

Schedule to reconcile net income to net cash flows : Prepare a schedule to reconcile net income to net cash flows from operating activities.

Weighted-average number of common shares : Assume EPS was reported in 2015 as $0.80, based on net income of $512 million and a weighted-average number of common shares of 640 million

Yield-to-maturity on one-year bond with zero coupon : The yield-to-maturity (YTM) on one-year bond with zero coupon and face value $ 1000 is 5 %.

Find the net profit margin of public company : Can you find the net profit margin of a public company as well as the industry average?

Project with the estimated cash flows : What is the PI of the project with the estimated cash flows below? The required rate of return is 19.9%.

What is the expected return of the bond : Calculate the annual return for the 30-year maturity bond over the next five years. What is the expected return of the 20-year bond.

Concerning murdoch in premise-conclusion form : From this passage, reconstruct an argument concerning Murdoch in premise-conclusion form.

The at-risk rules applicable to losses : With regard to S corporations and their shareholders, the “at-risk” rules applicable to losses

What is the gain or loss from the short call position : If the price of ABCD is 160 at expiration and you buy the calls back at parity, what is the gain or loss from the short call position?

User Account

All Pages