What is the irr of the project and is irr acceptable

Assignment Help Financial Accounting
Reference no: EM132503619

Question 1) Your firm plans to buy another company for $150 million. The acquisition is expected to generate net benefit of $20 million per year (at year-end) over 3 years and then $25 million indefinitely (perpetually). If your firm's cost of capital is 12%, what is the NPV of the proposal and is it worth it?

Question 2) Your firm has a cost of capital of 10%. A machine you want to buy is worth $5,000 and will generate net year-end net cashflow of $1,200, $1,800, $2,500, and then an estimated salvage value at the end of the 3rd year of $700. What is the IRR of the project and is it acceptable, why?

Reference no: EM132503619

Questions Cloud

What are the Basic and Diluted earnings per share amounts : What are the Basic and Diluted earnings per share amounts that Porter should report in its current year consolidated income statement
Explain why there are 2 supply curves in this model : Explain why there are 2 supply curves in this model and how we transition from one to the other.
Is the fair market value of a stock rises : Companies interested in maximizing shareholder value should choose capital projects with a Net Present Value of at least zero. TRUE OR FALSE?
Explain one reason why the ad demand curve : a) Explain why there are 2 supply curves in this model and how we transition from one to the other.
What is the irr of the project and is irr acceptable : $1,800, $2,500, and then an estimated salvage value at the end of the 3rd year of $700. What is the IRR of the project and is it acceptable, why?
Pure-strategy nash equilibria of the game : Model the above strategic situation with a normal form game and find all pure-strategy Nash equilibria of the game.
What is the net cash used by investing activities : What is the net cash used by investing activities? What is the net cash provided by operating activities? What is the net cash used by financing activities?
What was the motor lodge average daily rate : Total cash receipts for the evening totaled $9,000.00. What was the motor lodge's average daily rate (ADR) for that particular evening?
What kind of production function does the firm have : 1. Suppose the production function for face masks can be represented as q=f(K, L)=0.5K^0.3 L^0.3.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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