Light Sweet Petroleum, Inc., is trying to evaluate a generation project with the following cash flows: Year Cash Flow $ -32,000,000 1 $ 63,000,000 2 $ -16,000,000 What is/are the IRR(s) of this project? -82.94%, -77.94% -77.94%, 39.48% -70.32%, 20.32% -70.05%, 66.92% 66.92% only
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- Light Sweet Petroleum, Inc, is trying to evaluate a generation project with the followingcash flows: Year Cash Flow 0 −$45,000,000 1 71,000,000 2 −15,000,000 Which of these values is/are the IRR(s) of the project (22.26%, 32.65%, 46.89%, 52.66% -31.67%, -74.87%)? If the company requires a return of 12 percent on its investments, should it accept this project? Why?CRAYON corporation has identified the following two mutually exclusive projects: YEAR Cash flow ( A) Cash flow ( B) 0 -$300,000 -$300,000 1 68,950 135,000 2 83,900 105,500 3 93,200 75,000 4 105,600 55,600 5 115,600 45,600 What is the IRR for each of this project (range: 10-16%)? Using the IRR decision rule, which project should the company accept? How do you interpret IRR of a project? If the required return is 15%, what is the NPV of these projects? Which project will the company choose if it applies the NPV decision rule? How do you interpret NPV of a project? Calculate the Payback period and discounted pay back period of these projects! Which project should the company accept? What are the differences of payback period and discounted payback…Carland, Incorporated, has a project available with the following cash flows. If the required return for the project is 7.9 percent, what is the project's NPV? Year Cash Flow 0 -$ 258,000 1 66, 300 2 90, 400 3 117,800 4 70,900 5-12,000 $35, 378.61 $18, 968.78 $27, 173.69 $15, 173.69 $13,276.98
- Edmondson Electric Systems is considering a project that has the following cash flow and WACC data. What is the project's NPV? WACC 12.00% Year 0 1 2 3 Cash Flow -870 580 580 580 a. 490.67 b. 523.06 O c. 550.64 O d. 590.87Carland, Inc., has a project available with the following cash flows. If the required return for the project is 8.1 percent, what is the project's NPV? Year Cash Flow -$260,000 68,700 92,600 118,800 71,700 2 3 4 -12,200 Multiple Choice $17,147.72 $37,612.50 $21.082.94 $15,004.25 $29,347.72Carland, Inc., has a project available with the following cash flows. If the required return for the project is 8.9 percent, what is the project's NPV? Year Cash Flow -$268,000 78,300 101,400 122,800 74,900 -13,000 2 4
- Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows: Year Cashflow 0 -$300,000,000 1 2 3 4 5 6 7 8 $63,000,000 $85,000,000 -$50,000,000 $154,000,000 $157,000,000 -$50,000,000 $70,000,000 $72,000,000 - Construct a spreadsheet and calculate the following (the required rate of return is 7%): o Payback period o Discounted payback period o Net present value (NPV) o Modified IRR The discounting approach ▪ The reinvestment approach . The combination approach Based on your analysis, should the company take the project? Why?Blinding Light Company has a project available with the following cash flows: Year Cash Flow -$ 32,990 072345 8,360 10,090 14,470 16,130 11,120 What is the project's IRR?Living Colour Company has a project available with the following cash flows: Year Cash Flow 0 - $ 33, 630 1 8, 240 2 9,930 3 14, 190 4 15, 970 5 10,880 If the required return for the project is 8.8 percent, what is the project's NPV? Multiple Choice $11, 883.44 $25,580.00 $ 4,746.96 $12, 873.73 $13, 581.08
- PharmPic is considering the following project with the following cash flows: PharmPic Project Period Cash Flow 0 -$50,000 1 -$7,000 2 -$40,000 3 $10,000 4 $5,000 5 $20,000 6 $25,000 7 $32,000 8 $37,000 DosageDoc is considering the following project with the following cash flows: DosageDoc Project Period Cash Flow 0 -$50,000 1 70,000 2 -40,000 3 30,000 4 -7,000 PharmPic Project’s cash flows are semi-annually. PharmPic has the following two financing choices; loan with an APR of 6.5% compounding semi-annually or a loan with an APR of…Belgravia Petroleum Inc. is trying to evaluate a generation project with the following cash flows: Year Cashflow 0 -$300,000,000 1 $63,000,000 2 $85,000,000 3 -$50,000,000 4 $145,000,000 5 $175,000,000 6 -$50,000,000 7 $70,000,000 8 $72,000,000 Construct a spreadsheet and calculate the following (the required rate of return is 12%): Payback period Discounted payback period Internal rate of return (IRR) Modified IRR The discounting approach The reinvestment approach The combination approach Net present value (NPV) Based on your analysis, should the company take the project? Why?Company Z is considering a project that has the following cash flow data. What is this project's IRR? Year 0 1 2 3 4 Cash Flow -2,200 700 720 740 760 Group of answer choices 9.38% 12.18% 8.53% 10.36% 11.21%