Question: What is the internal rate of return for the project in question 2? In Question 2, what is the net present value of a simple

What is the internal rate of return for the project in question 2?

In Question 2, what is the net present value of a simple one-period project with an initial investment of $12,000 and an expected net cash flow in one year of $15,000, assuming a discount rate of 8 percent?

Step by Step Solution

★★★★★

3.45 Rating (165 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Internal rate of return is an investment appraisal technique us... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1261-B-F-F-M(9084).docx

120 KBs Word File

Students Have Also Explored These Related Finance Questions!

Brantley Shumaker opened a public relations firm called Gold Star Services on August 1, 2025. The following amounts summarize the business on August 31, 2025: During September 2025, the business...

An apartment building in your neighborhood is for sale for $140,000. The building has four units, which are rented at $500 per month each. The tenants have long-term leases that expire in 5 years....

Singular Construction is calculating whether to build a new distribution facility. The proposal investment will cost Singular $ 4 million to construct and provide cash savings of $ 500,000 per year...

The New York Taxi Cab Company has just purchased a new fleet of models for the year 2000. Each brand-new cab cost $20,000. From past experience, the company estimates after-tax cash returns for each...

1. Which one of the following defines the internal rate of return for a project? Discount rate that results in a net present value equal to the project's initial cost The project's current market...

Which one of the following defines the internal rate of return for a project? Discount rate that results in a net present value equal to the project's initial cost Discount rate that results in a...

Big Steve's, makers of swizzle sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $95,000 and will generate net cash inflows of...

Bing plc is evaluating the purchase of a machine and has the following information: Initial investment........................................350,000 Residual...

Project A requires an Initial (Year 0) Investment of $470,000 and will generates positive Net Cash Flows of $120,000 for the first 3 years of its life, $140,000 for the next three years and 75,000 in...

Ignoring the option to expand: (Points : 4) overestimates the internal rate of return on a project. ignores the possibility that a negative net present value project might be positive, given changes...

A common misconception is that if A has a strictly dominant eigenvalue, then, for any sufficiently large value of k, the vector Akx is approximately equal to an eigenvector of A. For the three...

List and briefly describe the five steps in the risk management process.

In which of the following methods of holding business meetings is nonverbal communication absent ? A ) telephone conferences D ) telepresence technologies C ) instant messaging a ) 4 deo conderences

Vilas Company is considering a capital investment of $190,000 in additional productive facilities. The new machinery is expected to have a useful life of 5 years with no salvage value . Depreciation...

Omega Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Annual income is constant over the life of the project. Each project is expected to...

Stereograms appear to be composed entirely of random dots. However, they contain separate images that a viewer can "fuse" into a three-dimensional (3D) image by staring at the dots while defocusing...

Having done poorly on their math final exams in June, six students repeat the course in summer school, and then take another exam in August. If we consider these students representative of all...

Lisa Ceja is unable to reconcile the bank balance for her catering company on January 31. Lisas reconciliation is as follows: Cash balance per bank .........$3,660.20 Add: NSF check ..............

Describe the project-related responsibilities of top management.

Explain why the NPV of a relatively long-term project, defined as one for which a high percentage of its cash flows are expected in the distant future, is more sensitive to changes in the cost of...

Explain why, if two mutually exclusive projects are being compared, the short-term project might have the higher ranking under the NPV criterion if the cost of capital is high, but the long-term...

In what sense is a reinvestment rate assumption embodied in the NPV, IRR, and MIRR methods? What is the assumed reinvestment rate of each method?

Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain her for an upfront payment of $50,000. In return, for the next year the firm would have access to...

Answer all questions with explanation The Appliance Parts Company manufactures small motors used in various household appliancees. Extensive reliability testing has determined that the failure...

The table below shows the number of deaths in the U.S. in a year due to a variety of causes. For these questions, assume these values are not changing from year to year, and that the population of...