Calculate the projects payback period, Financial Management

Assignment Help:

Project Z has a cost of $ 50,000.00, its expected net cash flows are $11,000 per year for 8 years, and its cost of capital is 12 % (Hint: begin by constructing a time line).

Instructions:

a. Calculate the project's payback period.
b. Calculate the project's discounted payback period.
c. Calculate the project's NPV.
d. Given that IRR for project Z = 15%, compared to another project; project B that has IRR= 18%? Evaluate project Z.

You plan to invest your money in a project that has the following set of cash flows?

Year Cash Flows

0 -$2,500
1 300
2 1,500
3 1,100
4 1,000

a. Calculate the project's payback period.
b. Calculate the project's discounted payback period given that cost of capital is 12 %.
c. Calculate the project's NPV.
d. According to the results in the previous sections; will you invest your money in the project? Explain.


Related Discussions:- Calculate the projects payback period

Features and purpose CDs , The distinct features of CDs are: CD is a ...

The distinct features of CDs are: CD is a document of title to a time deposit and is distinct from conventional time deposit with respect to negotiability and marketability.

State the cash flow from investing activities, Cash flow from investing act...

Cash flow from investing activities The items included in this heading are: Cash payments Cash receipts Acquiring proper

Illustrate the meaning of gearing, Illustrate the meaning of Gearing G...

Illustrate the meaning of Gearing Gearing is the relationship between equity anddebt. Debt is typically long term liabilities that the organisation has. Equity is all the shar

What is over capitalization, Question 1 What is over capitalization? How d...

Question 1 What is over capitalization? How do we know over capitalization has occurred? Question 2 Explain permanent and temporary working capital Question 3 A. What ar

Alternative dividend policies, The managing directors of three profitable l...

The managing directors of three profitable listed companies discussed their companies'' dividend policies at a business lunch. Company A; has deliberately paid no dividends for th

Uses of index numbers, Uses of Index Numbers 1. Establishes trends ...

Uses of Index Numbers 1. Establishes trends Index numbers when analyzed reveal a general trend of the phenomenon under study. The available figures for inflation based

Define debenture, Debenture Debenture is a document holding an acknowl...

Debenture Debenture is a document holding an acknowledgment of indebtedness on the part of organizations, usually secured by a charge on the company's assets.

What is public finance, What is Public Finance Central, state as well...

What is Public Finance Central, state as well as local governments handle large sums ofmoney, which are received from several sources and should be utilized in accordancewith

Illustrate modern method of measurements, Q. Illustrate Modern Method of Me...

Q. Illustrate Modern Method of Measurements? Holding Period Yield: The holding period yield is one of the modern techniques on Measuring return. It serves two purposes: a) I

Minimax decision, How to compare minimax and maximin with figures and comme...

How to compare minimax and maximin with figures and commentary ?

Write Your Message!

Captcha
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