Question
Gomi Waste Disposal is evaluating a project that would require an initial investment of 46,300 dollars today. The project is then expected to produce annual
Gomi Waste Disposal is evaluating a project that would require an initial investment of 46,300 dollars today. The project is then expected to produce annual cash flows that grow by 2.59 percent per year forever. The first annual cash flow is expected in 1 year and is expected to be 6,500 dollars. The projects internal rate of return is 16.63 percent and its cost of capital is 8.38 percent. What is the net present value (NPV) of the project? They are also evaluating a project that would last for 4 years. The projects cost of capital is 7.43 percent; its NPV is 69,515 dollars; and the expected cash flows are 24,400 dollars at time 0, 22,790 dollars in 1 year, -36,790 dollars in 3 years, and X in 4 years. What is X? Their last project would cost 82,800 dollars today. The project is expected to produce annual cash flows of 2,620 dollars forever with the first annual cash flow expected in 1 year. The NPV of the project is -57,752 dollars. What is the cost of capital of the project? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
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