HomeworkLib
Question

Green Inc. has invested in a project with a cost of $36,504, annual net cash flows...

Green Inc. has invested in a project with a cost of $36,504, annual net cash flows of $12,000, a terminal value of $4,000, and a 5-year useful life. The firm uses a 16% discount rate. Compute the internal rate of return to the nearest tenth of a percent. Ignore income taxes.

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1
Answer
Interest 16%
Year Cash Folw Present value
0 -$             36,504 -$                 36,504
1 $             12,000 $            10,344.83
2 $             12,000 $              8,917.95
3 $             12,000 $              7,687.89
4 $             12,000 $              6,627.49
5 $             12,000 $              5,713.36
5 $               4,000 $              1,904.45
Internal Rate of Return 20.85773%
IRR Formula used = IRR(E8:E14,16%)
0 0
Add a comment
Know the answer?
Add Answer to:
Green Inc. has invested in a project with a cost of $36,504, annual net cash flows...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A project has an initial outlay of $2,396. The project will generate annual cash flows of...

    A project has an initial outlay of $2,396. The project will generate annual cash flows of $593 over the 4-year life of the project and terminal cash flows of $285 in the last year of the project. If the required rate of return on the project is 11%, what is the net present value (NPV) of the project?

  • A project has an initial outlay of $1,522. The project will generate annual cash flows of...

    A project has an initial outlay of $1,522. The project will generate annual cash flows of $485 over the 7-year life of the project and terminal cash flows of $314 in the last year of the project. If the required rate of return on the project is 13%, what is the net present value (NPV) of the project?

  • 1. Allen Inc., is considering a project with the following cash flows.   Year Cash Flows 0...

    1. Allen Inc., is considering a project with the following cash flows.   Year Cash Flows 0 -$32,374 1 $6,334 2 $13,790 3 $12,995 4 $20,673 5 $29,260 The company uses a discount rate of 7 percent on all of its projects. Calculate the profitability index of the project? 2. Elway Corp. is considering a project with the following cash flows.   Year Cash Flows 0 -$45,331 1 $15,903 2 $24,490 3 $34,625 4 -$11,486 5 $40,937 The company uses a discount...

  • A project has an initial outlay of $2,087. The project will generate annual cash flows of...

    A project has an initial outlay of $2,087. The project will generate annual cash flows of $591 over the 5-year life of the project and terminal cash flows of $247 in the last year of the project. If the required rate of return on the project is 6%, what is the net present value (NPV) of the project? Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.

  • Ursus, Inc., is considering a project that would have a ten-year life and would require a...

    Ursus, Inc., is considering a project that would have a ten-year life and would require a $1,000,000 investment in equipment. At the end of ten years, the project would terminate and the equipment would have no salvage value. The project would provide net operating income each year as follows (Ignore income taxes.): Sales $ 2,000,000 Variable expenses 1,400,000 Contribution margin 600,000 Fixed expenses: Fixed out-of-pocket cash expenses $ 300,000 Depreciation 100,000 400,000 Net operating income $ 200,000 All of the...

  • 2. Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable...

    2. Oriental Corporation has gathered the following data on a proposed investment project: Investment in depreciable equipment Annual net cash flows Life of the equipment Salvage value Discount rate $ 450,000 $ 90,000 10 years $ 0 78 The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The payback period for the investment would be: Joetz Corporation has gathered the following data on a proposed investment project (Ignore...

  • 37) A project with an investment of $12,000 has net cash flows of $6,000, $5,000, 4,000,...

    37) A project with an investment of $12,000 has net cash flows of $6,000, $5,000, 4,000, and $3,000 for each of the next four years. Compute the average rate of return for the project? A. 2. 11 B. 1.86 C. 0.45 D. 0.99 E. 0.75

  • Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment...

    Joetz Corporation has gathered the following data on a proposed investment project (Ignore income taxes.): Investment required in equipment $ 40,000 Annual cash inflows $ 10,000 Salvage value of equipment $ 0 Life of the investment 15 years Required rate of return 10 % The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The simple rate of return for the investment (rounded to the nearest tenth of a...

  • Wing Air, Inc. has a project with the following cash flows: Required Return of 10%. Annual...

    Wing Air, Inc. has a project with the following cash flows: Required Return of 10%. Annual cash flows: Year 0 $(23,000) Year 1 $9,500 Year 2 $10,300 Year 3 $6,500 What is the internal Rate of Return (IRR)?

  • Consider the case of Green Caterpillar Garden Supplies Inc.: Last Tuesday, Green Caterpillar Garden Supplies Inc....

    Consider the case of Green Caterpillar Garden Supplies Inc.: Last Tuesday, Green Caterpillar Garden Supplies Inc. lost a portion of its planning and financial data when both its main and its backup servers crashed. The company’s CFO remembers that the internal rate of return (IRR) of Project Zeta is 14.6%, but he can’t recall how much Green Caterpillar originally invested in the project nor the project’s net present value (NPV). However, he found a note that detailed the annual net...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT