# Project #16410 - Finance Net Present Values

There are Four Net Present Value Problems. Below are the questions, I will also attach the file.

 For the given cash flows, suppose the firm uses the NPV decision rule.

 Year Cash Flow 0 –\$ 153,000 1 78,000 2 67,000 3 49,000

 Requirement 1: At a required return of 9 percent, what is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

 NPV \$

 Requirement 2: At a required return of 21 percent, what is the NPV of the project? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)

 NPV \$

 Consider the following cash flows:

 Year Cash Flow 0 –\$ 27,000 1 11,400 2 16,300 3 9,400

 Requirement 1: What is the NPV at a discount rate of zero percent? (Do not round intermediate calculations.)

 Net present value \$

 Requirement 2: What is the NPV at a discount rate of 10 percent? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

 Net present value \$

 Requirement 3: What is the NPV at a discount rate of 20 percent? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)

 Net present value \$

 Requirement 4: What is the NPV at a discount rate of 30 percent? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places (e.g., 32.16).)

 Net present value \$

 An investment has an installed cost of \$673,658. The cash flows over the four-year life of the investment are projected to be \$228,701, \$281,182, \$219,209, and \$190,376.

 Requirement 1: If the discount rate is zero, what is the NPV? (Do not round intermediate calculations.)

 NPV \$

 Requirement 2: If the discount rate is infinite, what is the NPV? (Do not round intermediate calculations. Negative amount should be indicated by a minus sign.)

 NPV \$

 Requirement 3: At what discount rate is the NPV just equal to zero? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

 Discount rate %

 The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is “looking up.” As a result, the cemetery project will provide a net cash inflow of \$109,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 5.1 percent per year forever. The project requires an initial investment of \$1,425,000.

 Required:

 (a) If Yurdone requires a return of 12 percent on such undertakings, what is the NPV of the project? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

 NPV \$

 (b) Should the cemetery business be started? (Click to select) Yes No

 (c) The company is somewhat unsure about the assumption of a growth rate of 5.1 percent its cash flows. At what constant growth rate would the company just break even if it still required a return of 12 percent on its investment? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimalplaces (e.g., 32.16).)

 Minimum growth rate %

 Subject Business Due By (Pacific Time) 11/10/2013 02:00 pm
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