A project has the following cash flows: Year Cash Flow0 -$4,2001 1,9002 1,8003 1,6004 500 a)...
A project has the following cash flows: Year Cash Flow0 -$4,2001 1,9002 1,8003 1,6004 500 a) Calculate the payback period of the project. b) If the cutoff period is three years, should this project be accepted? Why or why not?
Homework Answers
| Year | Cash flows | Cumulative Cash flows |
| 0 | (4200) | (4200) |
| 1 | 1900 | (2300) |
| 2 | 1800 | (500) |
| 3 | 1600 | 1100 |
| 4 | 500 | 1600 |
Payback period=Last period with a negative cumulative cash flow+(Absolute value of cumulative cash flows at that period/Cash flow after that period).
=2+(500/1600)
=2.3125 years
Hence since payback is less than 3 years;project must be accepted.
Add Answer to:
A project has the following cash flows: Year Cash Flow0 -$4,2001
1,9002 1,8003 1,6004 500 a)...
A project has the following cash flows: Year Cash Flow -$4,200 1,900 1,800 1,600 500...
A project has the following cash flows: Year Cash Flow -$4,200 1,900 1,800 1,600 500 Calculate the payback period of the project. (2 points) If the cutoff period is three years, should this project be accepted? Why or why not? (2 points)
Here are the expected cash flows for three projects: Cash Flows (dollars) Project Year: 1 2...
Here are the expected cash flows for three projects: Cash Flows (dollars) Project Year: 1 2 3 4 1,250 3,500 - 6,000 - 2,000 - 6,000 1,250 2,000 1,250 +3,500 5,500 2,500 1,250 3,500 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1....
Here are the expected cash flows for three projects: Project Year: 4 0 - 5,100 -...
Here are the expected cash flows for three projects: Project Year: 4 0 - 5,100 - 1,100 - 5,100 Cash Flows (dollars) 2 3 + 1,025 + 1,025 + 3,050 0 + 1,100 + 2,050 + 1,025 + 1,025 + 3,050 + 3,050 + 5,050 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a...
Here are the expected cash flows for three projects: Project Year: IU 0 - 5,700 -...
Here are the expected cash flows for three projects: Project Year: IU 0 - 5,700 - 1,700 - 5,700 Cash Flows (dollars) 1 2 3 + 1,175 + 1,175 + 3,350 0 + 1,700 + 2,350 + 1,175 + 1,175 + 3,350 4 0 + 3,350 + 5,350 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If...
Here are the expected cash flows for three projects: Project Year: 2 0 - 5,300 -...
Here are the expected cash flows for three projects: Project Year: 2 0 - 5,300 - 1,300 - 5,300 Cash Flows (dollars) 1 + 1,075 + 1,075 + 3,150 0 + 1,300 + 2,150 + 1,075 + 1,075 + 3,150 0 + 3,150 + 5,150 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a...
The cash flows associated with three independent projects (in millions) are as follows Net Cash Flows Proiect Alpha Project Beta Proiect Gamma Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 $1,500,000...
The cash flows associated with three independent projects (in millions) are as follows Net Cash Flows Proiect Alpha Project Beta Proiect Gamma Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 $1,500,000 $300,000 S500,000 S500,000 $400,000 $300,000 $400,000 $100,000 S200,000 $200,000 $100,000 S200,000 $7,500,000 $2,000,000 S3,000,000 S2,000,000 S1,500,000 $5,500,000 a) Calculate the payback period of each investment b) Which investments does the company accept if the cut-off payback period is three years? What if the cut-off is...
Here are the expected cash flows for three projects: Cash Flows (dollars) Project Year: 1 2...
Here are the expected cash flows for three projects: Cash Flows (dollars) Project Year: 1 2 4 -5,300 -1,300 -5,300 +1,075 +1,075 +1,300 +1,075 +3,150 +2,150 +3,150 0 +3,150 +5,150 +1,075 a. What is the payback period on each of the projects? Project Payback Period years A В years C years AB C b. If you use a cutoff period of 2 years, which projects would you accept? O Project A O Project B O Project C O Project A...
1. The cash flows associated with an investment project are as follows: Initial Outflow -$70,000 Year...
1. The cash flows associated with an investment project are as follows: Initial Outflow -$70,000 Year 1 $20,000 Year 2 $30,000 Year 3 $30,000 Year 4 $30,000 a) What’s the payback period of the project? If a firm’s cutoff payback period is 3 years, should it accept the project? b) If a firm uses discounted payback with a 15% discount rate and a 3-year cutoff period, what’s the discount payback period of the project? Should the firm accept the project?...
1. You have the chance to participate in a project that produces the following cash flows:...
1. You have the chance to participate in a project that produces the following cash flows: Cash Flows ($) C0 C1 C2 4,600 4,400 –10,800 a. The internal rate of return is 12.69%. If the opportunity cost of capital is 12%, what is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) NPV $ __________. 2. Consider the following projects: Cash Flows...
value 10.00 points Consider the following projects Cash Flows (S) Project Co -2,800 -5,600 -7,000 2,800...
value 10.00 points Consider the following projects Cash Flows (S) Project Co -2,800 -5,600 -7,000 2,800 2,800 2,800 2,800 2,500 2.800 2,800 2,800 2,800 8 5.800 a. If the opportunity cost of capital is 12%, which project(s) have a positive NPV? Positive NPV projects) O Project A O Project B O Project C O Projects A and B O Projects A and C Projects B and C O Projects A, B, and C O No project b. Calculate the payback...
Here are the expected cash flows for three projects: Cash Flows (dollars) Project Year: 1 2 3 4 1,250 3,500 - 6,000 - 2,000 - 6,000 1,250 2,000 1,250 +3,500 5,500 2,500 1,250 3,500 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a cutoff period of 3 years, which projects will you accept? d-1....
Here are the expected cash flows for three projects: Project Year: 4 0 - 5,100 - 1,100 - 5,100 Cash Flows (dollars) 2 3 + 1,025 + 1,025 + 3,050 0 + 1,100 + 2,050 + 1,025 + 1,025 + 3,050 + 3,050 + 5,050 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a...
Here are the expected cash flows for three projects: Project Year: IU 0 - 5,700 - 1,700 - 5,700 Cash Flows (dollars) 1 2 3 + 1,175 + 1,175 + 3,350 0 + 1,700 + 2,350 + 1,175 + 1,175 + 3,350 4 0 + 3,350 + 5,350 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If...
Here are the expected cash flows for three projects: Project Year: 2 0 - 5,300 - 1,300 - 5,300 Cash Flows (dollars) 1 + 1,075 + 1,075 + 3,150 0 + 1,300 + 2,150 + 1,075 + 1,075 + 3,150 0 + 3,150 + 5,150 a. What is the payback period on each of the projects? b. If you use the payback rule with a cutoff period of 2 years, which projects will you accept? c. If you use a...
The cash flows associated with three independent projects (in millions) are as follows Net Cash Flows Proiect Alpha Project Beta Proiect Gamma Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 $1,500,000 $300,000 S500,000 S500,000 $400,000 $300,000 $400,000 $100,000 S200,000 $200,000 $100,000 S200,000 $7,500,000 $2,000,000 S3,000,000 S2,000,000 S1,500,000 $5,500,000 a) Calculate the payback period of each investment b) Which investments does the company accept if the cut-off payback period is three years? What if the cut-off is...
Here are the expected cash flows for three projects: Cash Flows (dollars) Project Year: 1 2 4 -5,300 -1,300 -5,300 +1,075 +1,075 +1,300 +1,075 +3,150 +2,150 +3,150 0 +3,150 +5,150 +1,075 a. What is the payback period on each of the projects? Project Payback Period years A В years C years AB C b. If you use a cutoff period of 2 years, which projects would you accept? O Project A O Project B O Project C O Project A...
value 10.00 points Consider the following projects Cash Flows (S) Project Co -2,800 -5,600 -7,000 2,800 2,800 2,800 2,800 2,500 2.800 2,800 2,800 2,800 8 5.800 a. If the opportunity cost of capital is 12%, which project(s) have a positive NPV? Positive NPV projects) O Project A O Project B O Project C O Projects A and B O Projects A and C Projects B and C O Projects A, B, and C O No project b. Calculate the payback...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago