Finance Homework 4 Assignment
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Question 1
Calculate the project's IRR.
Do not write the '%' sign in your answer. If the answer is 12.45%, you will enter 12.45
Year | 0 | 1 | 2 | 3 | 4 |
Cash flows | −$1,050 | $400 | $400 | $400 | $400 |
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Question 2
Given the following cashflows calculate payback period.
WACC: | 10.00% |
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Year | 0 | 1 | 2 | 3 |
Cash flows | −$1,050 | $450 | $460 | $470 |
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Question 3
Find the payback period for a project that requires investment of $31 and returns $14 every years for 7 years.
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Question 4
IRR has the following drawbacks. Check all that apply. No credit if you miss or wrongly check any option.
[removed] | For a project with conventional cashflows you may decide to take a project based on IRR when NPV would have led you to reject the project. | |
[removed] | IRR assumes that intermediate cashflows from a project are invested at IRR | |
[removed] | IRR may lead you to a wrong decision if you are deciding between mutually exclusive projects. | |
[removed] | You may get a negative IRR | |
[removed] | There may be several IRRs if the cashflows are unconventional |
Question 5
A project has the following cashflow. Calculate NPV.
WACC: | 9.00% |
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Year | 0 | 1 | 2 | 3 |
Cash flows | −$1,000 | $500 | $500 | $500 |
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Question 6
A project has following cashflow. Calculate NPV
WACC: | 10.25% |
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Year | 0 | 1 | 2 | 3 | 4 | 5 |
Cash flows | −$1,000 | $300 | $300 | $300 | $300 | $300 |
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Question 7
Calculate the payback period for a project that requires investment of $5,400 and will provide the cashflows of $1,200, $400, $700, $3,000 and $500 in years 1 thru 5 respectively.
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Question 8
Given the following cashflows calculate NPV.
WACC: | 10.00% |
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Year | 0 | 1 | 2 | 3 |
Cash flows | −$1,050 | $450 | $460 | $470 |
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Question 9
Calculate the NPV of a project that requires investment of 781 and provides the cashflows of 487, 241, 346, 409 in the next 4 years. The relevant discount rate is 10%. (All numbers are in dollars)
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Question 10
Sco A project has the following cash flow. What is the project's NPV?
Discount rate: | 11.00% |
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Year | 0 | 1 | 2 | 3 | 4 |
Cash flows | −$1,000 | $350 | $350 | $350 | $350 |
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12 years ago
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