Related to oint and Checkpoint 11.4) (IRR and NPV calculation) The cash flows for three independent projects are found below: a. Calculate the IRR for each of the projects b. If the discount rate for all three projects is 11 percent, which project or projects would you want to undertake? c. What is the not present value of each of the projects where the appropriate discount rate is 11 percent? a. The IRR of Project Als % (Round to two decimal places.) Year 0 (Initial investment) Year 1 Year 2 Year 3 Year 4 Year 5 Project A $(65,000) $13,000 16,000 21,000 28,000 29,000 Project B $(105,000) $27,000 27,000 27,000 27,000 27,000 Project C $(400,000) $230,000 230,000 230,000 T (Discounted payback period) The Callaway Cattle Company is considering the construction of a new feed handling system for its feed lotin Abilene, Kansas. The new system will provide annual labor savings and reduced waste totaling $175,000 while the initial investment is only $505,000. Callaway's management has used a simple payback method for evaluating new investments in the past but plans to calculate the discounted payback to analyze the investment. Where the appropriate discount rate for this type of project is 12 percent, what is the project's discounted payback period? The project's discounted payback period in years. (Round to two decimal places.) (Discounted payback period) Gio's Restaurants is considering a project with the following expected cash flows: Year Project Cash Flow (millions) 0 $(240) 1 95 2 80 95 4 95 (Click on the icon in order to copy its contents into a spreadsheet.) If the project's appropriate discount rate is 13 percent, what is the project's discounted payback period? The project's discounted payback period is years. (Round to two decimal places.) Related to oint and Checkpoint 11.4) (IRR and NPV calculation) The cash flows for three independent projects are found below: a. Calculate the IRR for each of the projects b. If the discount rate for all three projects is 11 percent, which project or projects would you want to undertake? c. What is the not present value of each of the projects where the appropriate discount rate is 11 percent? a. The IRR of Project Als % (Round to two decimal places.) Year 0 (Initial investment) Year 1 Year 2 Year 3 Year 4 Year 5 Project A $(65,000) $13,000 16,000 21,000 28,000 29,000 Project B $(105,000) $27,000 27,000 27,000 27,000 27,000 Project C $(400,000) $230,000 230,000 230,000 T (Discounted payback period) The Callaway Cattle Company is considering the construction of a new feed handling system for its feed lotin Abilene, Kansas. The new system will provide annual labor savings and reduced waste totaling $175,000 while the initial investment is only $505,000. Callaway's management has used a simple payback method for evaluating new investments in the past but plans to calculate the discounted payback to analyze the investment. Where the appropriate discount rate for this type of project is 12 percent, what is the project's discounted payback period? The project's discounted payback period in years. (Round to two decimal places.) (Discounted payback period) Gio's Restaurants is considering a project with the following expected cash flows: Year Project Cash Flow (millions) 0 $(240) 1 95 2 80 95 4 95 (Click on the icon in order to copy its contents into a spreadsheet.) If the project's appropriate discount rate is 13 percent, what is the project's discounted payback period? The project's discounted payback period is years. (Round to two decimal places.)
