Question
Project X has an initial cost of $52,599, and its expected net cash inflows are $14,250 per year for 5 years. The firm has a
Project X has an initial cost of $52,599, and its expected net cash inflows are $14,250 per year for 5 years. The firm has a WACC of 10 percent, and Project Xs risk would be similar to that of the firms existing assets. Calculate the net present value (NPV) of Project X.
| a. | $18,651.00 | |
| b. | $12,173.73 | |
| c. | $8,358.36 | |
| d. | $1,419.71 | |
| e. | $54,018.71
|
Project Q has an initial cost of $74,047, and its expected net cash inflows are $17,250 per year for 8 years. The firm has a WACC of 14 percent, and Project Qs risk would be similar to that of the firms existing assets. Calculate Project Qs internal rate of return (IRR).
| a. | 19.64% | |
| b. | 14.00% | |
| c. | 86.37% | |
| d. | 16.37% | |
| e. | 8.09% |
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Personal Financial Planning
Authors: Randy Billingsley, Lawrence J. Gitman, Michael D. Joehnk
15th Edition
978-0357438480, 0357438485
