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Question;10-1 ? NPVA project has an initial cost of $40,000, expected net cash inflows of $9,000 per year for 7 years, and a cost of capital of 11%. What is the project?s NPV? (Hint: Begin by constructing the timeline)10-2 ? IRRRefer to problem 10-1. What is the project?s IRR?10-3 ? MIRRRefer to problem 10-1. What is the project?s MIRR?10-4 ? Profitability IndexRefer to problem 10-1. What is the project?s PI?10-5 ? PaybackRefer to problem 10-1. What is the project payback period?10-6 ? Discounted paybackRefer to problem 10-1. What is the project discounted payback period?10-7 ? NPVYour division is considering two investment projects, each of which requires an up-front expenditure of $15 million. You estimate that the investments will produce the following net cash flows:YEAR PROJECT A PROJECT B1 $ 5,000,000 $20,000,0002 10,000,000 10,000,0003 20,000,000 6,000,000A. What are the two projects' net present values, assuming the cost of capital is:a) 5%?b) 10%?c) 15%?B. What are the two project?s IRRs at the same cost of capital?

 

Paper#50892 | Written in 18-Jul-2015

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