Should the company accept the project

Assignment Help Finance Basics

Reference no: EM13258976

Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows:

Year

0 Cash Flow -$45,000,000

1 Cash Flow $78,000,000

2 Cash Flow -$14,000,000

a. If the company requires a 12 percent return on its investments, should it accept this project? Why?

b. Compute the IRR for this project. How many IRRs are there? Using the IRR decision rule, should the company accept the project? What's going on here?

Reference no: EM13258976

Questions Cloud

The current russian government : As the vice president of finance for a company producing and selling electronic switchboards, you are considering foreign investment to build a plant to assemble electronic components.

Determine the energy supplied by the voltage source : The charge leaving the positive reference terminal of a voltage source is q(t)= [6sin120pi*t - 8cos120pi*t]mC the voltage source value is v(t)= 160cos120pi*t V. A) Determine the power supplied by the voltage source at t=0

Discuss the potential impact marketers have : Compare and contrast cultural core beliefs/values and secondary beliefs/values. Provide an example of each and discuss the potential impact marketers have on each.

Compute the annual depreciation expense : Salvage value is estimated at $50,000. Actual activity was 180,000 units in 2004, and 200,000 units in 2006. Compute the annual depreciation expense for 2006.

Should the company accept the project : Compute the IRR for this project. How many IRRs are there? Using the IRR decision rule, should the company accept the project? What's going on here?

Determine the remaining obligation : What is the remaining obligation on January 1, 2010 afterthe first payment has been made?

State the chemical equations representing the first : Write the chemical equations representing the first, second, and third acid dissociations. 100mL 0.050 M phosphoric acid is titrated with 0.10 M NaOH. Calculate the pH of the solution after 25mL of NaOH have been added.

What is the net electric flux through the box : A 1.9cm × 1.9cm × 1.9cm box with its edgesaligned with the xyz-axes is in the electric field E? =(360x+150)i^N/C, where x is in meters

Case study of roosevelt company : On January 1, 2009, Roosevelt Company purchased 12% bonds, having a maturity value of $506,000.00, for $524,700.75. The bonds provide the bondholders with a 11% yield.

User Account

All Pages