What is the internal rate of return for project

Assignment Help Financial Management
Reference no: EM132014544

1. Fairfax Pizza is evaluating a project that would cost 6,453 dollars today. The project is expected to have the following other cash flows: 2,254 dollars in 1 year, 2,842 dollars in 2 years, and 3,864 dollars in 4 years. The NPV of the project is -56. What is the internal rate of return for the project?

2. Fairfax Paint is evaluating a project that would cost 6,728 dollars today. The project is expected to have the following other cash flows: 2,220 dollars in 1 year, 2,506 dollars in 3 years, and 3,169 dollars in 4 years. The internal rate of return for the project is 5.89 percent and the cost of capital for the project is 5.22 percent. What is the net present value of the project?

Reference no: EM132014544

Questions Cloud

What is the return you will realize after one year : If you conduct covered interest arbitrage, what is the return you will realize after one year?
Requires initial fixed asset investment : Down Under Boomerang, Inc. is considering a new three-year expansion project that requires an initial fixed asset investment of $1.65 million.
Offered unique investment opportunity : You have been offered unique investment opportunity. If you invest $10,000 today, What is the NPV of investment opportunity if interest rate is 10 % per year.
What is the maximum loan that the bank will allow : A bank will loan up to 75% of the equity in a home. What is the maximum loan that the bank will allow?
What is the internal rate of return for project : The NPV of the project is -56. What is the internal rate of return for the project? What is the net present value of the project?
Account immediately after you make the last withdrawal : How much will be in the account immediately after you make the last withdrawal?
The second year will represent repayment of principal : What fraction of the payment made at the end of the second year will represent repayment of principal?
What is your advice if the machine takes one year to build : Your buddy in mechanical engineering has invented a money machine. What is your advice if the machine takes one year to build?
Would any legal problem arise with such fee : They vowed to do their best to get their state legislatures to adopt this fee as law. Would any legal problem arise with such a fee?

Reviews

Write a Review

Financial Management Questions & Answers

  Compare the bank risk measures with those of peer banks

Compare the bank's risk measures with those of peer banks. What are the implications of any significant differences?

  How banks create credit and can thereby lend out more money

This problem illustrates how banks create credit and can thereby lend out more money than has been deposited. Suppose that initially $100 is deposited in a bank. Experience has shown bankers that on average only 8% of the money deposited are withdraw..

  What is the projects average accounting return

Sinan is considering investing in a project with an initial cost of 68000 and a four year life span. what is the projects average accounting return.

  Describe the differences between the bond ratings

Describe the differences between the bond ratings. Identify the strengths and weaknesses of each rating.

  Explain three difference between insurance and bonding

Explain three (3) difference between insurance and bonding. Explain how an individual may be eligible for the Personal Auto Policy.

  What is the decision rule for net present value technique

Why is capital budgeting an important process in the firm value-maximizing process of firms? What is the decision rule for the net present value technique?

  Estimated instrinic value per share of common stock

ABC Telecom Inc. is expected to generate a free cahs flow (FCF) of $9,900.00 million this year (FCF?1 ?= $9,900.00 million), and the FCF is expected to grow at a rate of 20.20% over the following two years (FCF2 and FCF3?). ABC Telecom Inc. debt has ..

  Future value-make single investment

(Future Value) Sarah Wiggum would like to make a single investment and have $2 million at the time of her retirement in 35 years. She has found a mutual fund that will earn 4 percent annually. How much will Sarah have to invest today? What if Sarah w..

  Proportion of of financing that came from debt and equity

Caraway Seeds estimated its weight average cost of capital to be 9.5% based on the fact that its after tax cost of debt financing was 11% and its cost of equity was 8%. What are the firms capital structure weights (the proportion of of financing that..

  What is the effective annual interest rate on the loan

What is the effective annual interest rate on the loan, taking account of the impact of the initiation fee?

  Closest to the value of the stock

which of the following is closest to the value of the stock?

  According to the dividend-discount model

According to the dividend-discount model, what is the value of a share of Gillette stock if the firm's equity cost of capital is 7.5%?

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