Question
Please use the following information to answer the remaining problems: Able Corporation has Project A with the following cash flows and a 7.7% cost of
Please use the following information to answer the remaining problems: Able Corporation has Project A with the following cash flows and a 7.7% cost of money: Numbers in parentheses are outflows. Both Year 0 and Year 3 cash flows are outflows. Year 0 1 2 3 4 5 6 Cash flow $(321,000) $ 95,000 $120,000 $(260,000) $ 230,000 $260,000 $180,000 15. Please calculate the net present value ______________ 16. Please calculate the profitability indexes (two decimals please)_________________ 17. Please calculate the modified profitability index using the terminal value approach in the textbook (two decimals please)_______________________ 18. Please calculate the internal rate of return (two decimals please)_____________________________ 19. Please calculate the modified internal rate of return (two decimals please and per the book)________________________ 20. Please calculate the payback period (two decimals please)________________________ 21. Please calculate the present value payback period (two decimals please)______________________ 22. You are opening your own business and estimate the following expenses and revenues: Revenues year 1 $210,000 growing at 9% thereafter Cost of goods sold year 1 $121,000 growing at 10% thereafter Operating expense year 1 $47,000 growing at 6% thereafter Taxes all in years 27% per year Depreciation $15,000 in year 1, $21,000 in year 2, $17,000 in year 3 No working capital is needed -- please predict the after-tax cash flows from operations for the first three years of operations below: Year 1_______________ Year 2__________________
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