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##### finance problems

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solution

**Question**

Question;Question 4;A project has an initial outlay of $4,000. It has a single payoff;at the end of Year 4 of $6,996.46. What is the IRR for the project (round to;the nearest percent)?;Answer;a.;13%;b.;21%;c.;15%;d.;16%;Question 8;A project has the following cash flows. What is the payback;period? Year Cash Flows 0 -5,000 1 2,700 2 3,300 3 1,400;Answer;a.;1.84 years;b.;1.70 years;c.;1.76 years;d.;1.88 years;e.;1.39 years;Question 13;Thompson Stores is;considering a project that has the following cash flow data. What is;the project's IRR? Note that a project's projected IRR can be less than;the WACC (and even negative), in which case it will be rejected.;Year;0;1;2;3;4;5;Cash flows;-$1,000;$300;$295;$290;$285;$270;Answer;a.;13.78%;b.;11.16%;c.;12.40%;d.;15.16%;e.;16.68%;1.;Suppose ABC Corp is considering whether to purchase a machine;today for $10,000. That machine will yield cash flows of $1000, $3,000, $2,500;$3,000, and $5,000 at the end of years 1, 2, 3, 4, and 5 respectively. Solve;for the Payback Period, NPV, IRR, PI, MIRR if the interest rate is 10%. Assume;that the cutoff determined by management is 3 years. Determine whether you will;accept or reject this project based on each investment criteria.;1.;Today, ABC Wines is;investing $239,000 in some new wine-making equipment. The firm expects the cash;flows to increase by $45,000 a year for the next 2 years and $60,000 a year for;the following 3 years. How long must the firm wait until it recovers all of its;initial investment?;2.;Using the information;from above, determine the NPV, PI, IRR, and MIRR if the required rate of return;is 8%.;1.;What is the payback period, NPV, IRR, PI, MIRR for a $20,000;investment with following cash flows? Assume 10% interest.;Year 0 1 2 3 4 5;Cash flow;-$20,000 $2,700 $8,300 $6,800 $4,800 $2,200

Paper#48084 | Written in 18-Jul-2015

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