User Account

All Pages

What is the internal rate of return

Assignment Help Finance Basics
Reference no: EM132637815

Development of a project can be completed all at once or worked in 3 stages. If worked all at once, the initial cost will be $900K. In stages, it will be $500K up front, then $300K in year 3 and $200K in year 6. Revenue for the project is expected to be $100K in the first year, then increase by 5K per year over the 12 year life of the project.

Determine the following using Excel.

a. What is the internal rate of return if the project is developed all at once?

b. What is the internal rate of return if the project is worked in 3 stages?

c. For the 3 stage project, compute the project balances over time (PBt). Determine if the IRR calculated is unique for the cash flow.

Checkpoint: PB3 = -615.6

d. Based on the economic analysis, should be project be worked in stages?

Reference no: EM132637815

Questions Cloud

How to select human capital : When was the last time you interviewed for a job? Did the process seem to flow smoothly? why or why not? How to Select Human Capital?
Describe processes to make handling change or alterations : Change is inevitable. Since this is the case, change should not be feared, rather embraced and managed as the book puts it and there are systems and processes.
Outside of overall protection from cyber-attacks : Discuss whether or not your organization has ISO 27001 certification. Outside of overall protection from cyber-attacks, describe,
Describe the aspects of a project changed : To me, change control is taking the proper steps to get an aspect or aspects of a project changed, without having to change the project completely.
What is the internal rate of return : Development of a project can be completed all at once or worked in 3 stages. If worked all at once, the initial cost will be $900K. In stages
Discuss the importance of personnel selection : Discuss the importance of personnel selection and recruitment as seen from the perspective of industrial and organizational psychology
Xhtml scripting to develop chinese zodiac template : In your text editor, use XHTML scripting to develop the Chinese zodiac template page, which will include five sections: Header, Footer, Text Navigation,
What is the payback period for project : A project has an initial cost of $31,400 and produces cash inflows of $7,200, $8,900, $7,500, $2,100, and $6,500 over the next five years, respectively.
Develop social perspective on use of accounting information : Develop an ethical and social perspective on the use of accounting information. Describe the financial accounting standard setting process

Reviews

Write a Review

Finance Basics Questions & Answers

  What would be the future value

Find the present value of $7,000 to be received one year from now assuming a 3 percent annual discount interest rate. Also calculate the present value if the $7,000 is received after two years.

  If a bank is failing short of meeting its capital

if a bank is failing short of meeting its capital requirements by 1 million what three things can it do to rectify the

  Calculate the change in the firm eps

Calculate the change in the firm's EPS from this change in capital structure. (Do not round intermediate calculations and round your final answers to 2 decimal)

  Calculate effects of fees on returns to hedge fund investors

What are the major disadvantages of return-based measures for performance measurement - calculate the effects of fees on the returns to hedge fund investors.

  Identify related documents and records that would be used

Discuss the essential activities involved in the initial planning of an audit. How do these all specifically apply to the Smackey Dog Food client? Keep in mind that we need a certified audit of all financial statements for the year but did not aud..

  How swaps are similar to but different from forward contract

Explain why interest rate swaps are more widely used than currency and equity swaps?- Explain how swaps are similar to but different from forward contracts?

  How do you manage your hedge during the pricing period

GASOILEAST CASE Questions - How do you manage your hedge during the pricing period? Calculate the final result of this trading transaction

  What will be effect of the price increase on the firms fcf

Depreciation and amortization charges are $20,000, and the firm has a 30 percent marginal tax rate. Management anticipates an increased working capital need of $3,000 for the year. What will be the effect of the price increase on the firm's FCF fo..

  What are the risks involved in conducting business

Explain the role of foreign exchange rates in conducting business globally. What are the risks involved in conducting business in a currency other.

  What is the maximum amount you are willing to pay to buy

What is the maximum amount you are willing to pay to buy one share of this stock today?

  What nominal annual interest rate is built into monthly plan

The first plan requires a $4,000 immediate up-front payment. The second plan requires you to make monthly payments of $137.41, payable at the end of each month for 3 years. What nominal annual interest rate is built into the monthly payment plan?

  Received a large inheritance

You want to save up $80,000 in 12 years to put toward your daughter's education. You just received a large inheritance and want to know how much

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd