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##### Suppose a project costs \$1,000 and produces cash flows of \$200 over each of the next three years and a cash flow of \$250 for each of the years four to six.

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Use the following information for this and the next question.;Suppose a project costs \$1,000 and produces cash flows of \$200 over each of the next three years and a;cash flow of \$250 for each of the years four to six.;What is the IRR of the project?;a. 15.2%;b. 10.0%;c. 24.3%;d. 8.8%;What is the NPV of the project if the required rate of return is 8 percent?;a. \$350;b. \$160;c. \$27;d. \$0;The following information is for this and the following two questions.;X and Y, LLC has two mutually exclusive projects available. The cash flows from these projects are;shown below.;What is the IRR of Project A and Project B, respectively?;a. 17.48% and 17.03%;b. 14.71% and 16.09%;c. 16.09% and 14.71%;d. 19.84% and 18.31%;If the required rate of return is 12%, what is the NPV of Project A and Project B, respectively?;a. \$3,568 and \$3,974;b. \$3,568 and \$7,051;c. \$5,735 and \$3,974;d. \$5,735 and \$7,051;What is the crossover rate between Project A and Project B?a. 18.31%;b. 14.17%;c. 16.09%;d. 19.84%;What is the Net Future Value (Terminal Value) of the following set of cash flows at 10% rate? (Hint: To;calculate terminal values, calculate the future value of all cash flows at the end of the project, and add;them together, that is, NFV = FV of Cash Inflows ? FV of Cash Outflows) (Answers are rounded.);a. \$ 0.00;b. ?\$500;c. ?\$770;d. ?\$1,360;Your required return is 12%. Should you accept a project with the following cash flows?;a. No, because the IRR is 13.9%.;b. No, because the IRR is 8.0%.;c. Yes, because the IRR is 13.9%.;d. Yes, because the IRR is 8.0%.;Use the following information for this and the next two question.;Suppose a project costs \$222,000 at start up, generates a cash flows of \$560,000 in year one, and costs;\$350,000 in year 2. There are no cash flows after year 2.;What is the first (lowest) IRR of the project?;a. 14.2083%;b. 10.0000%;c. 24.3125%;d. 38.0439%;What is the second IRR of the project?;a. 14.2083%;b. 10.0000%;c. 24.3125%;d. 38.0439%;What is the NPV of the project at 25 percent required rate of return?;a. 306.24;b. 1,611.11;c. 2,000.00;d. 1,668.64

Paper#77112 | Written in 18-Jul-2015

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