Calculate the projects payback period, Financial Management

Project Z has a cost of $ 50,000.00, its expected net cash flows are $11,000 per year for 8 years, and its cost of capital is 12 % (Hint: begin by constructing a time line).

Instructions:

a. Calculate the project's payback period.
b. Calculate the project's discounted payback period.
c. Calculate the project's NPV.
d. Given that IRR for project Z = 15%, compared to another project; project B that has IRR= 18%? Evaluate project Z.

You plan to invest your money in a project that has the following set of cash flows?

Year Cash Flows

0 -$2,500
1 300
2 1,500
3 1,100
4 1,000

a. Calculate the project's payback period.
b. Calculate the project's discounted payback period given that cost of capital is 12 %.
c. Calculate the project's NPV.
d. According to the results in the previous sections; will you invest your money in the project? Explain.

Posted Date: 2/14/2013 6:28:40 AM | Location : United States







Related Discussions:- Calculate the projects payback period, Assignment Help, Ask Question on Calculate the projects payback period, Get Answer, Expert's Help, Calculate the projects payback period Discussions

Write discussion on Calculate the projects payback period
Your posts are moderated
Related Questions
How can funds be raised Funds are raised from financial markets. Financial markets is a general term used todenote markets where financial securities are teat. These markets in

Applicant should have been well versed in the calculation of actuarial losses and gains on pensions. It would have been significant to ensure each item affecting liabilities and as

Typically, there exist two types of bids in the treasury auction process. They are: Competitive bid and non-competitive bid. A non-competitiv

Deferred coupon bonds are generally issued at a discount price and are used for financing leveraged buyouts. The coupon payment on these types o

which type of financing is appropriate to each firm

Q. Cost of Equity Share Capital? Cost of Equity Share Capital: - The cost of equity is the utmost rate of return that the company should earn on equity financed position of its

The Nu-Nu Brothers Inc. (NNBI) has the following capital structure, which it considers to be optional: Debt 25% Preferred Stock 15% Common Equity 60% NNBI''''s expected net income

How are foreign exchange transactions between international banks settled? Answer:  a network of correspondent banking relationships is known as the interbank market with large c

This case has been framed in order to test the skills in evaluating a credit request and reaching a correct decision. Perluence International is large manufacturer of petroleum and

A cash-flow yield is the discount rate that makes the price of a mortgage-backed or asset-backed security equal to the present value of its cash flows. It is built