Bhupatbhai Problem 13-2 NPV with Non-normal Cash Flows (LG13-3)Compute the NPV statistic for Project U if the appropriate cost of capital is 11 percent.Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answerto 2 decimal places.Project UTime:02Cash flow: -$ 2,200 $ 630 $ 2,180NPV3-$ 6604$ 5805-$ 240

Step 1:We have to calculate the net present value of the project.The formula of net present…

Answered: Problem 13-2 NPV with Non-normal Cash…

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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Problem 13-2 NPV with Non-normal Cash Flows (LG13-3) Compute the NPV statistic for Project Ud the appropriate cost of capital is 9 percent Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. Project U Time: 1 Cash flow -$1,150 $450 $1,830 - 550 $ 440 -$ 170 NPV Should the project be accepted or rejected? Accepted
Consider projects A and B: Cash Flows (dollars) Project A Co -30,500 C1 C2 21,400 21,400 NPV at 11% +$6,148.00 B -50,500 33,500 33,500 + 6,869.53 a. Calculate IRRS for A and B. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project A B IRR % % b. Which project does the IRR rule suggest is best? O Project A ○ Project B c. Which project is really best? ○ Project A O Project B k
Project A B Cash Flows (dollars) C1 21,800 34,000 Project A B Со -31,000 -51,000 a. Calculate IRRs for A and B. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Project A Project B IRR % % Project A O Project B C2 21,800 34,000 b. Which project does the IRR rule suggest is best? c. Which project is really best? NPV at 12% + $5,843.11 + 6,461.73
Problem 8-6 Profitability Index (LO3) The following are the cash flows of two projects: Year Project A Project B $ (270) $ (270) 1 150 170 2 150 170 3 150 170 4 150 If the opportunity cost of capital is 12%, what is the profitability Index for each project? Note: Do not round Intermediate calculations. Round your answers to 4 decimal places. Project A B Profitability Index
16 Compute the NPV statistic for Project U if the appropriate cost of capital is 11 percent. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. Project U Time: 0 1 2 3 Cash flow: -$ 2,350 $ 690 $ 2,330 -$ 690 NPV Should the project be accepted or rejected? (Click to select) v 4 $ 640 -$ 270
Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Y Time: Cash flow: NPV 0 -$8,000 3 1 2 $3,350 $4,180 $1,520 4 $300
Problem 13-11 MIRR (LG13-4) Compute the MIRR statistic for Project I if the appropriate cost of capital is 11 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project I Time: 0 1 2 3 4 Cash flow: −$11,100 $5,380 $4,230 $1,570 $2,050 Should the project be accepted or rejected? accepted rejected
Compute the NPV for Project M if the appropriate cost of capital is 7 percent. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final a to 2 decimal places. Project M Time: 0 1 2 3 4 5 Cash flow: -$2,300 $610 $740 $780 $860 $360 NPV $ 681.60
Consider two mutually exclusive projects A and B: Project Cash Flows (dollars) NPV at 12% Co C 0 C1 C 1 C2 C 2 A-35,500 25,400 25,400 + $7,427 B -55,500 38,500 38,500 +9,567 Calculate IRRS for A and B. Note: Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.
Problem 13-13 PI (LG13-6) Compute the PI statistic for Project Z if the appropriate cost of capital is 7 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project Z Time: 0 1 2 3 4 5 Cash flow: –$1,400 $430 $560 $730 $380 $180 Should the project be accepted or rejected? accepted rejected
Problem 13-11 MIRR (LG13-4) Compute the MIRR statistic for Project I if the appropriate cost of capital is 12 percent. (Do not round intermediate calculations and round your final answer to 2 decimal places.) Project I Time: Cash flow: 0 1 -$11,600 $5,630 $4,480 2 3 $1,820 4 $2,300 MIRR % ces Should the project be accepted or rejected? O rejected accepted
Compute the NPV statistic for Project Y if the appropriate cost of capital is 12 percent. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your final answer to 2 decimal places. Project Y Time: 0 1 Cash flow: -$ 8,900 $ 3,530 2 $ 4,360 3 $ 1,700 4 $ 480 NPV Chec

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