Calculate a modified irr for project

Assignment Help Finance Basics
Reference no: EM131167473

Your firm is considering a project that will cost $4.404million upfront, generate cash flows of $3.45million per year for 33years, and then have a cleanup and shutdown cost of $6.03million in the fourth year.

a. How many IRRs does this project have?

b. Calculate a modified IRR for this project assuming a discount and compounding rate of 9.8%.

c. Using the MIRR and a cost of capital of 9.8 %9.8%,would you take the project?

Reference no: EM131167473

Questions Cloud

What is the expected return of the risky : a) Suppose Mr. Weiss holds the bond to maturity. What will be his holding period return if Risky Corp. does not default? What will be his holding period return if the firm defaults? b) What is the expected return of the Risky Corp. bond? Is the bon..
What key element of a social network distinguishes : What key element of a social network distinguishes it from a pure agglomeration or an industrial complex? How can we use the long-run prisoner’s dilemma to better understand why this may happen?
Recognize that in competitive markets : Now that you have finished finance, you know there are things that we know matter and things that we think matter and things that we know very little about. Adopting NPV>0 projects is in the set of things that we know matter. We recognize that in com..
Create a box plot for the variable days : Create a box plot for the variable Days, based on all 91 billings. - Also, create side-by-side box plots for Days for the three separate customer sizes.
Calculate a modified irr for project : a. How many IRRs does this project have? b. Calculate a modified IRR for this project assuming a discount and compounding rate of 9.8%. c. Using the MIRR and a cost of capital of 9.8 %9.8%,would you take the project?
Discuss obstacles faced by the working poor as illustrated : Discuss the obstacles faced by the working poor as illustrated in this book, and research the cost of living for a single parent of two children in the city of Tampa, Florida while working a minimum wage job. For example, how much is an apartment?..
Portfolio of two foreign currencies : 1) Describe why holding a portfolio of two foreign currencies with a correlation coefficient of 0.92 could be considered high risk. 2) What is the expected % rate of return on the euro for the next month? How much is that in US dollars?
Find confidence interval for proportion of large customers : Find a 95% confidence interval for the proportion of all large customers who pay bills of at least $1000 at least 15 days after they are billed.
Optimal mix for production and pricing of product : Imagine you are tasked with recommending an optimal mix for production and pricing of a product. How would you go about utilizing economic indicators and data to make that recommendation? Please use a specific product as an example in your initial po..

Reviews

Write a Review

 

Finance Basics Questions & Answers

  What is the additional dollar amount

If Mr. Jim wishes to maintain his proportionate ownership in the company, what is the additional dollar amount he will be required to make assuming he can purchase the new shares from the company at a 5% discount?

  Business knowledge in the related subject area

Question 1: Determine the primary manner in which ORION has increased your business knowledge in the related subject area.

  For example can you think of some industries in which this

for what kinds of capital investment projects do you think monte carlo simulation would be most useful? for example can

  Current ratio measure

Determine what financial information does the current ratio measure and when you calculate a current ratio, what does the calculated number mean?

  How much gainor loss will george have to recognize

How much gain/loss will George have to recognize if he uses the FIFO method of accounting for the shares sold? How much gain/loss will George have to recognize if he specifically identifies the shares to be sold?

  Determining a firm capital structure

What are agency costs, and how do they become a relevant consideration in determining a firm's capital structure? Please use a business or personal example to illustrate your point.

  Present value of future cash flow

A company anticipates taxable cash receipt of $70,000 in year five of project. The company's tax rate is 30% and its discount rate is 12%. The present value of this future cash flow is closest to:

  What is your expected starting salary

Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.09 and 0.15, respect..

  Total dollar value after the contract

Enter a contract to deliver your pounds for dollars at the forward exchange rate $1.94/pound. What's the total dollar value after the contract?

  Restaurant purchasing a pos systemnance''s restaurant

Restaurant Purchasing a POS SystemNance's Restaurant, a local independent restaurant, is evaluating new point-of-sale (POS) systemsand must determine if a new installation is feasible. A new POS installation would includeboth software and hardware, w..

  What is its price if the market rate of return

An issue of common stocks most recent dividend is 1.75 Its growth rate is 5.7 percent What is its price if the market's rate of return is 7.7 percent?

  Explain portfolio management

Explain Portfolio management - Forex Using the currency exposures and exchange rates given above

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd