Answered step by step
Verified Expert Solution
Question
1 Approved Answer
#1 A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the following cash flows: Year 0 1
| #1 | ||||||
| A firm evaluates all of its projects by applying the IRR rule. | ||||||
| A project under consideration has the following cash flows: | ||||||
| Year | 0 | 1 | 2 | 3 | ||
| Cash Flows | -$28,700.00 | $12,700.00 | $15,700.00 | $11,700.00 | ||
| If the required return is | 15% | |||||
| What is the IRR for this Project? | ||||||
| Year | 0 | 1 | 2 | 3 | ||
| Cash Flows | -$28,700.00 | $12,700.00 | $15,700.00 | $11,700.00 | ||
| PVIF | ||||||
| PV | ||||||
| Prove a zero PV | ||||||
| #2 | ||||||
| A firm evaluates all of its projects by applying the NPV decision rule. | ||||||
| A project under consideration has the following cash flows: | ||||||
| Year | 0 | 1 | 2 | 3 | ||
| Cash Flows | -$28,300.00 | $12,300.00 | $15,300.00 | $11,300.00 | ||
| What is the NPV for the project if the required return is | 11% | |||||
| Year | 0 | 1 | 2 | 3 | ||
| Cash Flows | -$28,300.00 | $12,300.00 | $15,300.00 | $11,300.00 | ||
| PVIF | ||||||
| NPV | ||||||
| #3 | ||||||
| A project that provides annual cash flows of | $16,900.00 | for eight years costs | $75,000.00 | today. | ||
| What is the NPV for the project is the required rate of return is | 7.00% | |||||
| Periods | ||||||
| PMT | ||||||
| Required Return | ||||||
| PVIF | ||||||
| PVIFA | ||||||
| PV | ||||||
| Cost | ||||||
| NPV | ||||||
| #4 | ||||||
| What is the IRR of the following set of cash flows? | ||||||
| Year | 0 | 1 | 2 | 3 | ||
| Cash Flows | -$16,600.00 | $7,300.00 | $8,600.00 | $7,100.00 | ||
| PVIF | ||||||
| NPV | ||||||
| IRR | ||||||
| #5 | ||||||
| A project has the following cash flows: | ||||||
| Year | 0 | 1 | 2 | 3 | ||
| Cash Flows | -$16,900.00 | $10,500.00 | $10,500.00 | $10,500.00 | ||
| WACC | 28.00% | 28.00% | 28.00% | 28.00% | ||
| What is the MIRR? | ||||||
| Year | 0 | 1 | 2 | 3 | ||
| Cash Flows | -$16,900.00 | $10,500.00 | $10,500.00 | $10,500.00 | ||
| WACC | 28.00% | 28.00% | 28.00% | 28.00% | ||
| FVIF | ||||||
| FVIFA | ||||||
| FV | ||||||
| PVIF | ||||||
| PV | ||||||
| Cost | ||||||
| NPV | ||||||
| MIRR | ||||||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Campaign Finance
Authors: Robert E. Mutch
1st Edition
0190274697, 9780190274696
