14) Annual cash flows: A Year 0 -49000 Year 1 35000 Year 2 19000 Year 3...

Question

Question

14)

business finance

Answer 1

Answer #1

Let irr be x%
At irr,present value of inflows=present value of outflows.

49000=35000/1.0x+19000/1.0x^2+15000/1.0x^3

Hence x=irr=23.12%(Approx).

Answer 2

Similar Homework Help Questions

13) Annual cash flows: CDMA Year 0 -18000 Year 1 15000 Year 2 9000 Year 3...

13) Annual cash flows: CDMA Year 0 -18000 Year 1 15000 Year 2 9000 Year 3 4000 Required return 9% Calculate Profitability Index?
A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,00...

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,000 in years 6-12. The company's required return is 12%. Given this information calculate the IRR of the project.
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)?

You've estimated the following cash flows (in $) for a project: A B 1 Year Cash flow 2 0 -5,100 3 1 1,325 4...

You've estimated the following cash flows (in $) for a project: A B 1 Year Cash flow 2 0 -5,100 3 1 1,325 4 2 2,148 5 3 2,742 The required return for the project is 8%. Part 1 What is the IRR for the project?
vital silence, inc., has a project with the following cash flows: year cash flow 0 -$28,900...

vital silence, inc., has a project with the following cash flows: year cash flow 0 -$28,900 1 12,900 2 15,000 3 11,900 the required return is 14 percent. what is the IRR for thos project?
A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years...

A twelve year project has a cost of $250,000, annual cash flows of $40,000 in years 1-5, and annual cash flows of $30,000 in years 6-12. The company's required return is 12%. Given this information calculate the IRR 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 the following cash flows: Year Cash Flows 0 -2,500 1 750 2 800...

A project has the following cash flows: Year Cash Flows 0 -2,500 1 750 2 800 3 500 4 400 5 300 6 250 What is the Internal Rate of Return (IRR) of this project?
A project has the following cash flows: year. Cash flow 0. $71,000 1. -50,000. 2. -29,200...

A project has the following cash flows: year. Cash flow 0. $71,000 1. -50,000. 2. -29,200 a. What is the IRR for the project? (Do not round intermediate calculations and enter answer as a percent round to 2 decimal places) b. What is the NPV of this project if the required return is 6 percent? c. What is the NPV of the project if the required return is 0 percent? d. What is the NPV of the project if the...

14. Consider four projects with the following sequences of cash flows: n 0 NET CASH FLOWS...

14. Consider four projects with the following sequences of cash flows: n 0 NET CASH FLOWS A B C -$25,000|-$23,000-$56,500 $12,000 $32,000 -$2,500 $23,000 $32,000-$6,459 $34,000 $25,000 $88,345 3 (a) Identify all the simple investments. (b) Identify all the non-simple investments. (c) Compute the Internal Rate of Return (IRR) for each project using NPV method and Excel. Note the following: A simple (or conventional) investment is simply when one sign change occurs in the net cash flow series. If the...