A project that costs $2,000 to install will provide annual cash flows of $510 for the...
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A project that costs $2,000 to install will provide annual cash flows of $510 for the next 6 years. 37. What is project NPV if the discount rate is 3%? Should this project be pursued? 38. What is project NPV if the discount rate is 10%? Should this project be pursued? 39. Will the firm's decision change as the discount rate changes? How? 40. What is the Profitability Index for this project? 3% and 10% 41. What is the Payback Period for this project? The firm accepts projects with Payback Periods of less than 4 years. 42. Will the project be accepted? If there are any conflicts on the investment decisions, which would you choose? A stock is selling today for $80 per share. At the end of the year, it pays a dividend of $4 per share and sells for $92. 43. What is the total rate of return on the stock? 44. Calculate the dividend yield. 45. Calculate the capital gain? 46. Now suppose the year-end stock price after the dividend is paid is $76. Calculate the dividend yield and percentage capital gain in this case? A project that costs $2,000 to install will provide annual cash flows of $510 for the next 6 years. 37. What is project NPV if the discount rate is 3%? Should this project be pursued? 38. What is project NPV if the discount rate is 10%? Should this project be pursued? 39. Will the firm's decision change as the discount rate changes? How? 40. What is the Profitability Index for this project? 3% and 10% 41. What is the Payback Period for this project? The firm accepts projects with Payback Periods of less than 4 years. 42. Will the project be accepted? If there are any conflicts on the investment decisions, which would you choose? A stock is selling today for $80 per share. At the end of the year, it pays a dividend of $4 per share and sells for $92. 43. What is the total rate of return on the stock? 44. Calculate the dividend yield. 45. Calculate the capital gain? 46. Now suppose the year-end stock price after the dividend is paid is $76. Calculate the dividend yield and percentage capital gain in this case?
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