Project #25100 - Homework

Question 1 (1 point)

 

 

Quick Sale Real Estate Company is planning to invest in a new development. The cost of the project will be $23 million and is expected to generate cash flows of $14,000,000, $11,750,000, and $6,350,000 over the next three years. The company's cost of capital is 20 percent. What is the internal rate of return on this project? (Round to the nearest percent.)

 

Question 1 options:

 

20%

 

24%

 

22%

 

28%

 

Question 2 (1 point)

 

 

Muncy, Inc., is looking to add a new machine at a cost of $4,133,250. The company expects this equipment will lead to cash flows of $816,322, $863,275, $937,250, $1,018,110, $1,212,960, and $1,225,000 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment?

 

Your Answer:

 

Question 3 (1 point)

 

 

Given the following cash flows for a capital project, calculate the IRR using a financial calculator

 

Year

 

0

1

2

3

4

5

Cash Flows

($50,467)

$12,746

$14,426

$21,548

$8,580

$4,959

 

Question 3 options:

 

8.41%

 

8.05%

 

8.79%

 

7.9%

 

Question 4 (1 point)

 

 

An investment of $83 generates after-tax cash flows of $50.00 in Year 1, $72.00 in Year 2, and $129.00 in Year 3. The required rate of return is 20 percent. The net present value is

 

Your Answer:

 

 

 

 

Question 5 (1 point)

 

 

Cortez Art Gallery is adding to its existing buildings at a cost of $2 million. The gallery expects to bring in additional cash flows of $520,000, $700,000, and $1,000,000 over the next three years. Given a required rate of return of 10 percent, what is the NPV of this project?

 

Question 5 options:

 

-$197,446

 

$1,802,554

 

$197,446

 

-$1,802,554

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question 6 (1 point)

 

 

Which ONE of the following statements about the payback method is true?

 

Question 6 options:

 

A. The payback method is consistent with the goal of shareholder wealth maximization

 

B. The payback method represents the number of years it takes a project to recover its

initial investment plus a required rate of return.

 

C. There is no economic rational that links the payback method to shareholder wealth maximization.

 

D. None of these statements are true.

 

Question 7 (1 point)

 

 

McKenna Sports Authority is getting ready to produce a new line of gold clubs by investing $1.85 million. The investment will result in additional cash flows of $525,000, $817,500, and $1,215,000 over the next three years. What is the payback period for this project?

 

Your Answer:

 

 

 

 

 

 

 

 

 

 

 

Question 8 (1 point)

 

 

Monroe, Inc., is evaluating a project. The company uses a 13.8 percent discount rate for this project. Cost and cash flows are shown in the table. What is the NPV of the project?

Year            Project

  0              ($11,368,000)

  1               $  2,202,590

  2               $  3,787,552

  3               $  3,250,650

  4               $  4,115,899

  5               $  4,556,424

 

 

Your Answer:

 

 

 

Subject Business
Due By (Pacific Time) 03/16/2014 12:00 am
Report DMCA
TutorRating
pallavi

Chat Now!

out of 1971 reviews
More..
amosmm

Chat Now!

out of 766 reviews
More..
PhyzKyd

Chat Now!

out of 1164 reviews
More..
rajdeep77

Chat Now!

out of 721 reviews
More..
sctys

Chat Now!

out of 1600 reviews
More..
sharadgreen

Chat Now!

out of 770 reviews
More..
topnotcher

Chat Now!

out of 766 reviews
More..
XXXIAO

Chat Now!

out of 680 reviews
More..
All Rights Reserved. Copyright by AceMyHW.com - Copyright Policy