What are the assumptions implied by the npv and irr

Assignment Help Finance Basics
Reference no: EM13289860

Consider the following Investment: Time Cash Flow 1 $1300 2 $2400 3 $1100 4 $1200 The investment outlay is $6000. The required return is 10.75%. Required payback period is 18 months.

a. What is the NPV, and IRR, and Payback of this investment?

b. Is this a profitable investment?

c. What are the decision rules you used for NPV and IRR of this investment?

d. What are the assumptions implied by the NPV and IRR?

e. What are the decision rules you used for the payback?

 

Reference no: EM13289860

Questions Cloud

Write a comprehensive marketing plan that identifies markete : write a comprehensive marketing plan that identifies your market, establishes a price point, chooses a distribution channel, proposes a communication (advertising) venue, and identifies who will be the buyer of the product. Your plan should be ..
Compute the mass of air and the clean dry stoppered flask : Devise a plan to calculate the mass of air that was contained in the clean dry stoppered flask, using the mass measurements you will make during the experiment. the calculation will require another density value besides the density of air.
Describes both glucose and fructose : Which description BEST describes Fructose. Which description BEST describes Glucose. Which description BEST describes both Glucose and Fructose
What specific supporting tactics with respect to packaging : What specific supporting tactics with respect to packaging, branding, labeling, advertising & promotion, merchandising, and distribution will you implement to support the rollout? Does Apollo/Montreaux USA possess the required capabilities & ..
What are the assumptions implied by the npv and irr : Consider the following Investment: Time Cash Flow 1 $1300 2 $2400 3 $1100 4 $1200 The investment outlay is $6000. The required return is 10.75%. Required payback period is 18 months.
What is the rms load current and rms primary current : A step-down transformer has a120V rms primary voltage applied and a 12V rms voltage is measuredat the secondary. Assuming the transformer can be considered ideal, determine the turns ratio, n.
B2b-pattern e-marketing processes : "B2B-pattern e-marketing processes that entail exchanges among business/organization customers (e.g., financial donors supporting suppliers/vendors, or advertisers promoting educational involvement of health care organizations)
How many different gametes can these flies produce : How many different gametes can these flies produce (again, we only care about the 2nd and 3rd chromosomes here). Now draw out the Punnett square for an inter se cross among these flies.
What is the firms cost of newly issued common equity : Bonds: 12% semiannual coupon with 15 year maturity. Current price is $1153.72, and no flotation cost.

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Regulating depository financial institutions

Why the United State public has not acceted the concept "The free market is the best regulator of business" for regulating depository financial institutions.

  Risk of finance-portfolio-investments

What are unique risks associated with foreign investments? How might an investor protect his/her portfolio against these risks? Is it possible to protect a portfolio from all types of risk? Explain your answer.

  Contrast primary market and secondary market transactions

Financial management is concerned with the maintenance and creation of wealth. For the risk-averse financial manager, the more risky a given course of action, the higher the expected return must be.

  How much interest will refinancing save

Interest rates have dropped and the owner wants to refinance the unpaid balance by signing a new 30-year mortgage at 6% compounded monthly. How much interest will refinancing save? Round to the nearest cent as needed.

  Determine if the decision to buy the new computer

On the basis of 15% MARR (i.e., reinvestment rate), determine if the decision to buy the new computer was economically sound. That is, what was the "external rate of return"?

  Find the expected stock price

Taylor Corporation's expected year-end dividend is $1.60, its required return is 11 percent, its dividend yield is 6 percent, and its growth rate is expected to be constant in the future.

  Compute the value of this stock today which is time 0

A firm does not pay a dividend. It is expected to pay its first dividend of $0.20 per share in three years. This dividend will grow at 11 percent indefinitely. Use a 12 percent discount rate. Compute the value of this stock today which is time 0.

  Include depreciation and working capital

include depreciation and working capital in the following NPV analysis, because depreciation for the machinery goes for longer than the project timeline, and working capital needs to be accounted for as a percentage of sales.

  Determine the focal length of the projection lens

How far from the object should the lens of the projector be placed to form the image on the screen?

  Discuss the ability of central banks to manage

Further discuss the ability of central banks to manage domestic economic problems while maintaining a pegged exchange rate?

  What is the expected one-year interest rate

The one-year spot interest rate is r1=6.7% and the two year rate is r2=7.7%. I fthe expectations theory is correct, what is the expected one-year interest rate in one year's time?

  How many shares need to be sold

The offer price is $45 per share and the company's underwriters charge a spread of 7 percent. The SEC filing fee and associated administrative expenses of the offering are $550,000. (Enter your answer as directed, but do not round intermediate cal..

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