(IRR with uneven cash flows) The Tiffin Barker Corporation is considering introducing a new currency verifier that has the ability to identify counterfeit dollar bills. The required rate of return on this project is 12 percent. What is the IRR on this project if it is expected to produce thefollowing free cash flows: E?The IRR on this project is %. (Round to two decimal places)Data table(Click on the following icon in order to copy its contents into a spreadsheet)Initial outlay- $1,088,524FCF in year 1240,000FCF in year 2360,000FCF in year 3360,000FCF in year 4240,000FCF in year 5240,000FCF in year 6140,000

Calculate the IRR of the project using Excel as follows:Formula sheet:Notes:To understand the…

Answered: (IRR with uneven cash flows) The Tiffin…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider the cash flow data in the table below for two competing investment projects. At i= 10%, which of the two projects would be a better choice? Click the icon to view the cash flows for the investment projects. Click the icon to view the interest factors for discrete compounding when i = 10% per year. The PW value for project A is S. (Round to the nearest dollar.) More Info More Info Single Payment Compound Cash Flow Data (Unit: $ thousand) Project B Amount Factor (F/P, i, N) 1.1000 1.2100 1.3310 1.4841 1.6105 1.7716 1.9487 2.1438 2.3579 2.5937 0 1 2 3 4 5 6 7 8 9 10 Project A - $1,100 - 1,500 -435 1,005 1,005 1,325 1,795 605 605 355 850 - $3,300 -780 800 950 1,220 1,730 1,500 980 890 410 1,050 N 1 2 3 4 5 6 7 8 10 Present Worth Factor (P/F, i, N) 0.9091 0.8264 0.7513 0.6830 0.6209 0.5845 0.5132 0.4665 0.4241 0.3855 Compound Amount Factor (F/A, i, N) 1.0000 2.1000 3.3100 4.6410 6.1051 7.7156 9.4872 11.4350 13.5795 15.9374 Equal Payment Series Sinking Present Fund Worth Factor…
NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint: Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept (x-axis). (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 = - $300,000 Year 1= $42,000 Year 2 = $77,000 Year 3 = $111,000 Year 4 = $140,000 What is the NPV of Project L-2 where zero is the discount rate? $ 70000.00 (Round to the nearest dollar.) What is the IRR of Project L-2? % (Round to two decimal places.)
I want you to show and explain the explanation below. The answer is correct but i can't understand how it come up with the right answer. Attached pic below is the problem The annual estimated cash flow is $140,000. The salvage value will be 12% of the initial price after 5 years. The discount rate (r) is 18% Let us assume the initial price of the doughnut machine be X. PV of cash inflows=PV of cash outflows$140,000×PVAF4,18%+.12X×PVF5,18%=X$140,000×2.69006180465+.12X×0.43710921621=X$376,608.652651=X-0.05245310594$376,608.652651=0.94754689406XX=$397,456.479475 The maximum purchase price of the doughnut machine is $397,456.48.
You are choosing between two projects. The cash flows for the projects are given in the following table ($ million): a. What are the IRRs of the two projects? b. If your discount rate is 4.7%, what are the NPVs of the two projects? c. Why do IRR and NPV rank the two projects differently? Data table (Click on the following icon in order to copy its contents into a spreadsheet.) Year 0 Project A Year 1 - -$51 $27 B - $101 $22 Year 2 $21 $42 Year 3 $20 Year 4 $13 $51 $59 - ☑
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NPV profile of a project. Given the following cash flow of Project L-2, draw the NPV profile. Hint. Be sure to use a discount rate of zero for one intercept (y-axis) and solve for the IRR for the other intercept ( x-axis). (Click on the following icon ◻ in order to copy its contents into a spreadsheet.) Year 0=-$300,000 Year 1=$50,000 Year 2=$79,000 Year 3=$118,000 Year 4=$130,000 What is the NPV of Project L-2 where zero is the discount rate? $ (Round to the nearest dollar.) What is the IRR of Project L-2? % (Round to two decimal places.) Which of the graphs below best fits the NPV profile of the project? Click on the magnifying glass icon to see an enlarged version of each graph. (Select the best response.) B. D.
A project has the following cash flows. Year 0 1 2 3 4 Amount -200 950 -850 75 12 You are a financial analyst, and note the sequence of cash flows. What is the internal rate of return for this project? Round your answer to two decimal places.

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