FIN 515 Mid term
Waqas Ahmed (Not rated)
(Not rated)
8. (TCO F) A project requires an initial cash outlay of $95,000 and has expected cash inflows of $20,000 annually for 9 years. The cost of capital is 10%. What is the project’s payback period? Show your work. (Points : 10) 9. (TCO F) A project requires an initial cash outlay of $60,000 and has expected cash inflows of $15,000 annually for 8 years. The cost of capital is 10%. What is the project’s IRR? Show your work. (Points : 20) |
10. (TCO F) A project requires an initial cash outlay of $95,000 and has expected cash inflows of $20,000 annually for 9 years. The cost of capital is 10%. What is the project’s discounted payback period? Show your work. (Points : 20)
11. (TCO F) Company A has the opportunity to do any, none, or all of the projects for which the net cash flows per year are shown below. Projects A and C can be done together. Projects B and C can be done together. But Projects A and B are mutually exclusive. The company has a cost of capital of 18%. Which should the company do and why? You must use at least two capital budgeting methods. Show your work.
A | B | C | |
0 | -500 | -500 | -600 |
1 | 200 | -200 | 100 |
2 | 200 | 600 | 100 |
3 | 200 | 400 | 100 |
4 | 200 | 200 | 100 |
5 | 200 | -300 | 100 |
6 | 200 | 100 | |
7 | -300 | 100 |
- 8 years ago
A+ SOLUTION ATTACHED
NOT RATED
Purchase the answer to view it
- fin_515_mid_term.docx