Question
Help 1- An auto-parts company is deciding whether to sponsor a racing team for a cost of $1000000. The sponsorship would last for 6 years
Help
1- An auto-parts company is deciding whether to sponsor a racing team for a cost of $1000000. The sponsorship would last for 6 years and is expected to increase cash flows by $600000 per year. If the discount rate is 10%, what will be the change in the value of the company if it chooses to go ahead with the sponsorship? Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."
2- The owners of a chain of fast-food restaurants spend $15000000 installing donut makers in all their restaurants. This is expected to increase cash flows by $6000000 per year for the next 4 years. The discount rate is 10%. What is the net present value of installing the donut makers?"" Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."
3- "Consider a project with the cash flow as depicted in Table 1: The discount rate for this project is 5%. The net present value (NPV) is ________."" Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."
Table 1
Year | Cash Flow |
0 | -11,000 |
1 | 7,000 |
2 | 4,000 |
3 | 3,000 |
4 | 1,000 |
4- Consider the two projects depicted in Table 2: The net present value (NPV) of project A is ________. Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."
Table 2
Project | Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Discount |
Cash Flow | Cash Flow | Cash Flow | Cash Flow | Cash Flow | Rate | |
A | -250 | 60 | 100 | 85 | 0 | 0.1 |
B | -200 | 60 | 30 | 30 | 30 | 0.1 |
5- "Consider the two projects depicted in Table 2: The net present value (NPV) of project B is ________. Note: Express your answers in strictly numerical terms. For example, if the answer is $500, write enter 500 as an answer."
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