PayPal is considering an update to its app. The update would cost 10 million dollars today, and 6 million dollars 1 year from now. In years 2-6, the update would increase PayPal's cash flows by 6 million dollars. What is the IRR of this project?
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PayPal is considering an update to its app. The update would cost 10 million dollars today, and 6 million dollars 1 year from now. In years 2-6, the update would increase PayPal's cash flows by 6 million dollars. What is the
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- Suppose Kyler Valley is deciding whether to purchase new accounting software. The payback for the $30,050 software package is five years, and the software's expected life is nine years. Kyler Valley's required rate of return for this type of project is 11.0%. Assuming equal yearly cash flows, what are the expected annual net cash savings from the new software? (1) ÷ (2) = Expected annual net cash inflow ÷ = (1) Amount invested Average amount invested Expected useful life Payback Required rate of return (2) Amount invested Average amount invested Expected useful life Payback Required rate of returnYour firm is considering a project that will cost $4.719 million up front, generate cash flows of $3.55 million per year for 3 years, and then have a cleanup and shutdown cost of $5.96 million in the fourth year. a. How many IRRS does this project have? b. Create an NPV profile for this project (plot the NPV as a function of the discount rate-see the appendix). (NOTE: students will solve this question part using Excel only. A student response is not included in MyFinanceLab). c. Given a cost of capital of 9.9% should this project be accepted? a. The project has IRRS. (Select from the drop-down menu.) 2 3 4If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
- Google is considering building a new data center. The project will require an initial cash outlay of $ 10,000,000 and will generate annual net cash inflows of $ 2,500,000 per year for five years. Calculate the project's NPV assuming a discount rate of 7% a. $ 250,000 b. $ 200,494 c. $ 250,494 d. $ 494,250A company is considering investing in a new machine that requires a cash payment of $47,947 today. The machine will generate annual cash flows of $21,000 for the next three years. What is the internal rate of return if the company buys this machine?OpenDoor Cafe is considering opening a new food court in a major US city. The initial investment is expected to be $ 12,550,000. The projected cash flows are $4, 955,000 in years one and two, $2, 185,000 in year three, $2,715,000 in year four, and $3,040,000 on year five. What is this project's internal rate of return? Group of answer choices 6.70% 17.26 % 11.28% 15.02%
- Two new software projects are proposed to a young, start-up company. The Alpha project will cost $1,150,000 to develop and is expected to have annual net cash flow of $140,000. The Beta project will cost $1,200,000 to develop and is expected to have annual net cash flow of $150,000. The company is very concerned about their cash flow. Using the payback period, which project is better from a cash flow standpoint? Why?K Your firm is considering a project that will cost $4.446 million up front, generate cash flows of $3.47 million per year for 3 years, and then have a cleanup and shutdown cost of $6.03 million in the fourth year. a. How many IRRS does this project have? b. Create an NPV profile for this project (plot the NPV as a function of the discount rate see the appendix). (NOTE: students will solve this question part using Excel only. A student response is not included in MyFinanceLab). c. Given a cost of capital of 10.1% should this project be accepted? a. The project has hmd IRRS. (Select from the drop-down menu.) 2 3 4Oasis Entertainment Systems is setting up to manufacture a new line of video game consoles. The cost of the manufacturing equipment is OMR 1750000. Expected cash flows over the next four years are OMR 725000, OMR 850000, OMR 1200000, and OMR 1500000. Given the company's required rate of return of 15 percent, what is the NPV of this project? Select one: a. 3122607.27 OMR b. 4669806.27 OMR c. None of these d. 2919806.27 OMR e. 1169806.27 OMR
- Skyline Industries will need $2.2 million in 4.5 years from now to replace some equipment. Currently, the firm has some extra cash and would like to establish a savings account for this purpose. The account pays 3.6 percent interest, compounded annually. How much money must the company deposit to fully fund the equipment purchase? Can the calculator and excel solution be provided?Two new software projects are proposed to a young, start-up company. The Delta project will cost $150,000 to develop and is expected to have annual net cash flow of $40,000. The Echo project will cost $200,000 to develop and is expected to have annual net cash flow of $50,000. The company is very concerned about their cash flow. Using the payback period, which project is better from a cash flow standpoint? Why? Present the payback period for each project. Use this formula: Payback period = Investment/Annual SavingsAlcon Inc. is planning to invest in in-house developed mobile apps for healthcare. They have forecasted that with the new mobile apps the following are the expected cash flows that will be generated: - This project will generate $10 million at end of Year 1 which will grow at a rate of 10% for the next 4 years from Year 1 onwards (i.e.1 to 2, 2 to 3, 3 to 4,4 to 5). From Year 5 onwards, the growth rate in cash flows will stabilize at 3% per year till perpetuity. If the hurdle rate is 15% p.a. compounded continuously, what is the Present Value (at t = 0) in $millions of the Cash Flows generated (in what range will the answer be)?