You are the financial analyst for the Glad Its Finally Over Company. The director of capital budgeting
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Question:
- You are the financial analyst for the Glad It’s Finally Over Company. The director of capital budgeting has asked you to analyze a proposed capital investment. The project has a cost of $35,000 and the cost of capital is 7.5%. The project’s expected net cash flows are as follows:
Year Expected Net Cashflow
0 -35,000
1 14,500
2 11,000
3 11,000
4 5,000
Questions:
1. If the cash inflows are received throughout the year, the payback period given this scenario is _____ years? (round two decimals)
2. If the cash inflows are received throughout the year, the project’s discounted payback period is ___ years? (round two decimals)
3. The project’s Net Present Value is $_______,? (rounded to 2 decimal places)
4. The project’s Internal Rate of Return is ______%, ?(rounded to 2 decimal places)
5. The project’s Modified Internal Rate of Return is ______%, ? (rounded to 2 decimal places).
(Please show work in excel if possible)
Related Book For
Corporate Finance
ISBN: 978-0077861759
10th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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