Question: 1)Compute the NPV statistic for Project Y if the appropriate cost of capital is 10 percent. (Negative amount should be indicated by a minus sign.
1)Compute the NPV statistic for Project Y if the appropriate cost of capital is 10 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: | 0 | 1 | 2 | 3 | 4 |
| Cash flow: | $8,500 | $3,730 | $4,560 | $1,900 | $680 |
2)Compute the discounted payback statistic for Project C if the appropriate cost of capital is 8 percent and the maximum allowable discounted payback period is three years. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
| Project C | ||||||
| Time: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow: | $1,000 | $480 | $480 | $520 | $300 | $100 |
3)Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively.
| Time: | 0 | 1 | 2 | 3 | 4 | 5 | 6 |
| Cash flow: | $5,000 | $1,200 | $2,400 | $1,600 | $1,600 | $1,400 | $1,200 |
Use the payback decision rule to evaluate this project. (Round your answer to 2 decimal places.)
4)Compute the payback statistic for Project A if the appropriate cost of capital is 9 percent and the maximum allowable payback period is four years. (Round your answer to 2 decimal places.)
| Project A | ||||||
| Time: | 0 | 1 | 2 | 3 | 4 | 5 |
| Cash flow: | $2,400 | $910 | $900 | $800 | $580 | $380 |
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