Question
1. Polk Products is considering an investment project with the following cash flows: Year 0 = -$100,000 (initial costs); Year 1= $40,000; Year 2 =$90,000;
1. Polk Products is considering an investment project with the following cash flows: Year 0 = -$100,000 (initial costs); Year 1= $40,000; Year 2 =$90,000; and Year 3 = $30,000; and Year 4 = $60,000. The company has a 10% cost of capital, calculate the IRR for the project.
A. 10%
B. 20.8%
C. 30.1%
D. 40.7%
E. 50.3%
2. What is the project's discounted payback?
A.1.67 years
B.1.86 years
C.2.11 years
D.2.49 years
E.2.67 years
3. Calculate the NPV for the project.
A.$56,281
B.$67,476
C.$74,264
D.$78,496
E.$80,387
4.The Seattle Corp. is considering a new project. The firm has already paid $10,000 consulting fee for the feasibility analysis of the project. The project costs $230,000 to purchase buildings and equipment, $10,000 for shipping fee, and $10,000 for installation fee. Compute the depreciation basis of the project.
A. $260,000
B. $250,000
C. $240,000
D. $230,000
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