Question
1. What is the Net Present Value (NPV) for the cash flows provided in the table below? Note: The negative cash flow for year 0
1. What is the Net Present Value (NPV) for the cash flows provided in the table below? Note: The negative cash flow for year 0 is the initial investment for the project. The required rate of return is 8% and the internal rate of return is 9.70%. year cashflow
0 -100,000
1 40,000
2 40,000
3 40,000
2. What is the Internal Rate of Return (IRR) for the cash flows provided in the table below? Note: The negative cash flow for year 0 is the initial investment for the project. The required rate of return is 8%.
year cashflow
0 -100,000
1 45,000
2 45,000
3 45,000
3. Creative Centers Inc. has an EBIT of $200,000, $30,000 in depreciation, $450,000 in outstanding debt, a forward-looking EV/EBITDA multiple of 7.50, and an estimated cost of capital of 10%. Use the EV/EBITDA approach to find the value of equity.
(please show me how to use the financial calculator to answer those questions)
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