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#7 Project Alpha promises equal and consecutive payments of $65,000 over a 5 year period. The required return is 12.50% What is the MIRR and
#7 | Project Alpha promises equal and consecutive payments of $65,000 over a 5 year period. | ||||||
The required return is 12.50% | |||||||
What is the MIRR and would you accept or reject the project? | |||||||
a | MIRR = | 12.50% reject | |||||
b | MIRR = | 12.16% reject | |||||
c | MIRR = | 12.16% accept | |||||
d | MIRR = | 12.50% accept | |||||
The weigted average cost of capital = | |||||||
Period | Cash Flows | FVIF | FV5 | Revised Cfs | PVIF | NPV | |
Solo Corp. is evaluating a project with the following cash flows: | |||||||
Year Cash Flow | |||||||
#8 | 0 ($654,980) | ||||||
1 $275,000 | |||||||
2 $285,000 | |||||||
3 $295,000 | |||||||
4 $305,000 | |||||||
5 $315,000 | Period | ||||||
The WACC = | 13.00% | ||||||
What is the Profitability Index and should you rejecr or accept the project? | |||||||
a | PI = | 1.47% accept | |||||
b | PI = | 1.47% reject | |||||
c | PI = | 1.57% reject | |||||
d | PI = | 1.57% accept | |||||
Year | 0 | 1 | 2 | 3 | 4 | 5 | |
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