What is the initial cost of the project

Assignment Help Financial Management

Reference no: EM13946917

A project has expected cash inflows, starting with year 1, of $2,200, $2,900, $3,500, and finally in year 4, $4,000. The profitability index is 1.14 and the discount rate is 12 percent. What is the initial cost of the project?

$7,899.16

$8,098.24

$8,166.19

$9,211.06

$9,250.00

Reference no: EM13946917

Questions Cloud

What is the sustainable growth rate for a firm : What is the sustainable growth rate for a firm with $250,000 in net income, $20,000 in preferred stock dividends, $80,000 in common stock dividends, and an average equity balance of $1 million?

Consider the hypothetical convertible bond : Consider the following hypothetical convertible bond: Calculate each of the following: Conversion value, Market conversion price, Conversion premium per share, Conversion premium ratio

Normally pays an annual dividend : MMK Cos. normally pays an annual dividend. The last such dividend paid was $3.05, all future dividends are expected to grow at a rate of 8 percent per year, and the firm faces a required rate of return on equity of 14 percent. If the firm just announ..

Use the AFN equation to forecast the additional funds Carter : AFN Equation Carter Corporation’s sales are expected to increase from $5 million in 2014 to $6 million in 2015, or by 20%. Its assets totaled $3 million at the end of 2014. Carter is at full capacity, so its assets must grow in proportion to projecte..

What is the initial cost of the project : A project has expected cash inflows, starting with year 1, of $2,200, $2,900, $3,500, and finally in year 4, $4,000. The profitability index is 1.14 and the discount rate is 12 percent. What is the initial cost of the project?

Financial ratio analysis of firm projected cash flow budget : Explain how financial ratio analysis of a firm’s projected cash flow budget could be efficiently used by its managers for financial planning. (b) Explain why creating budgets and other financial planning is an important part of business planning.

What is annual operating cash flow : D&G is analyzing a 5 year project for fixed assets of 1.6m.... the cost will be depreciated on a SL basis to zero book value over life of the project. At the end of the project the assets will be worthless. The projected annual sales are 1.1m and the..

Stock portfolio invested-what is the portfolio beta : You own a stock portfolio invested 35 percent in Stock Q, 30 percent in Stock R, 20 percent in Stock S, and 15 percent in Stock T. The betas for these four stocks are .79, 1.17, 1.18, and 1.35, respectively. What is the portfolio beta?

Using economic order quantity model in placing the orders : Cheeseburger and Taco Company purchases 19,632 boxes of cheese each year. It costs $29 to place and ship each order and $3.81 per year for each box held as inventory. The company is using Economic Order Quantity model in placing the orders. What is t..

User Account

All Pages