Use the npv decision rule to evaluate this project

Assignment Help Financial Management
Reference no: EM131966699

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 10 percent, and that the maximum allowable payback and discounted payback statistics for your company are 3.0 and 3.5 years, respectively.

Time: 0 1 2 3 4 5

Cash flow –$355,000 $66,800 $85,000 $142,000 $123,000 $82,200

Use the NPV decision rule to evaluate this project. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Round your final answer to 2 decimal places.)

NPV $

Reference no: EM131966699

Questions Cloud

Explain the characteristics of a potential target : Review this week's Learning Resources and consider the possible characteristics of a potential target of that cyber victimization.
How has pmmm brought success to sap : How has PMMM brought success to both SAP and Petrotrin's overall enterprise? Use current financial, operational, and strategic news to support article.
Determine the future worth in year ten of cash flow series : Determine the future worth in year 10 of a cash flow series that starts in year 0 at $100,000 and decreases by 12% per year.
Covariance of returns on the two stocks : What is the (population) covariance of returns on the two stocks?
Use the npv decision rule to evaluate this project : Use the NPV decision rule to evaluate this project.
Test the claim that the mean of the population : Using the Critical Value Method, test the claim that the mean of the population is greater than 55. Take a=5%.
Distinguish between income statements-cash flow statements : Distinguish between income statements and cash flow statements. Why do company need both?
What are the shared values of the organization : What are the shared values of the organization? What are the behaviors espoused by these values? Is there consensus on the mission and vision of organization?
What is the probability that a student would get 7 : A multiple choice exam has 5 possible answers (only one is correct) for each of the 10 questions.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

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