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10-1. A project has an initial cost of $52, 125,ex...

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10-1. A project has an initial cost of $52, 125,expected net cash inflows of $12,000 per year for 8 years, and a cost of capital of 12%. What is the project?s NPV? (Hint: Begin by constructing a time line.) 10-2. Refer to Problem 10-1. What is the project?s IRR? 10-3. Refer to Problem 10-1. What is the project?s MIRR? 10-4. Refer to Problem 10-1. What is the project?s PI? 10-5. Refer to Problem 10-1. What is the project?s payback period? 10-6. Refer to Problem 10-1. What is the project?s discounted payback period? 10-7. Your division is considering two investment projects, each of which requires an upfront expenditure of $15 million. You estimate that the investments will produce the following net cash flows: Year_________Project A_______Project B 1 $5,000,000 $20,000,000 2 10,000,000 10,000,000 3 20,000,000 6,000,000 a. What are the two projects? net present values, assuming the cost of capital is 5%? 10%? 15%? b. What are the two projects? IRRs at these same costs of capital?

 

Paper#5462 | Written in 18-Jul-2015

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