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Your company considers seven new projects. Discount rate is 15%. You need to analyze these projects. Calculate the NPV of the first project using an

  1. Your company considers seven new projects. Discount rate is 15%. You need to analyze these projects.

    1. Calculate the NPV of the first project using an embedded function based on the information: An initial investment cost is $42,000. The project generates $8,720 in the first year. The cash flows have zero growth and the project only generates cash flows for 20 years.

    2. Calculate the NPV of the second project based on the information: An initial investment cost is $55,700. The project generates $5,100 in the first year, and continue to grow at a constant rate of 7% for 15 years.

    3. Calculate the NPV and IRR of the third project based on the information: An initial investment cost is $7,500. The project generates $1,250 in the first year. The cash flows have zero growth and the project is expected to generate cash flows forever.

    4. The fourth project has the same initial investment cost and generates the same first cash flows with the third project. However, the fourth project continue to grow at a constant rate of 6% per year forever. Calculate the NPV and IRR of the fourth project.

    5. Calculate the NPV and IRR of the fifth project based on the below information: An initial investment cost is $1,089,000 and its salvage value is $330,000. The project has expected cash flows of $125,000, $175,000, $246,000, $380,000, $452,000, and $439,100 over next six years.

    6. The sixth project has estimated free cash flows (FCF) of $900,000, $900,300, $802,000, $1,000,000, and $1,042,000 over next five years and believes that subsequent cash flows will grow at a constant rate of 3% forever. Calculate the TODAYs terminal value of cash flows and total value of the project.

    7. The last project has the same FCF with the sixth project. However, in the last projection period (year 5), the project has EBITDA of $8,500,000 and assume its EBITDA exit multiple of 10. Calculate the TODAYs terminal value of cash flows and total value of the project.

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