Calculate the npv of the project

Assignment Help Finance Basics
Reference no: EM131441637

Question: Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 -$ 594,000 1 224,000 2 167,000 3 232,000 4 211,000 All cash flows will occur in Erewhon and are expressed in dollars. In an attempt to improve its economy, the Erewhonian government has declared that all cash flows created by a foreign company are "blocked" and must be reinvested with the government for one year. The reinvestment rate for these funds is 7 percent. Assume Anderson uses a required return of 13 percent on this project. What is the NPV of the project? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Net present value $ What is the IRR of the project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Internal rate of return %

Reference no: EM131441637

Questions Cloud

Explain how public service loan forgiveness may help mark : Show all different payment estimates under Public Service Loan Forgiveness (PSLF). Explain how Public Service Loan Forgiveness (PSLF) may help Mark with his student loan debt.
Firm profit maximization problem : Consider a numerical example for the firm's profit maximization problem. Suppose that the firm's production function is y=ln(K) +ln(N) . The firm's initial capital is K= 1.5. The current period wage rate is w= 0.1, the future period wage rate is w..
Draw a structure containing only carbon and hydrogen : Draw a structure containing only carbon and hydrogen that is a chiral alkyne with six carbon atoms
Way of conducting and managing foreign affairs : This issue is a perfect example of the flawed nature of the multilateral way of conducting and managing foreign affairs.  While much of the current international system that was established after World War II sounded good in theory, in practice it..
Calculate the npv of the project : Anderson International Limited is evaluating a project in Erewhon. The project will create the following cash flows: Year Cash Flow 0 -$ 594,000 1 224,000 2 167,000 3 232,000 4 211,000 All cash flows will occur in Erewhon and are expressed in doll..
Evaluate the soundness of the companys financial policies : Evaluate the soundness of the company's financial policies (e.g. capital structure, debt, leverage, dividend policy, etc.) based on the material covered during class.
Explain what would be the data load and refresh cycles : For an airlines company, identify three operational applications that would feed into the data warehouse. What would be the data load and refresh cycles
Poor in developing countries : Have you done anything or worked with any institutions that have helped the poor in developing countries?
What would be the data load and refresh cycles : For an airlines company, identify three operational applications that would feed into the data warehouse. What would be the data load and refresh cycles

Reviews

Write a Review

Finance Basics Questions & Answers

  If one of the stocks has a beta of 105 and the total

you own a portfolio equally invested in a risk-free asset and two stocks. if one of the stocks has a beta of 1.05 and

  How many steps are needed to execute the instructions

The expression of Exercise 10.2.2 can be executed by the sequence of instructions shown in Fig. 10.6. If we have as much parallelism as we need, how many steps are needed to execute the instructions?

  Determining the nonconstant growth

Microtech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Microtech to begin paying dividends, beginning with a dividend of $1.00 coming 3 years from t..

  Estimate of the maximum share price for the purchase

After examining your analysis, the CFO of Happy Times is uncomfortable using the perpetual growth rate in cash flows. Instead, she feels that the terminal value should be estimated using the EV / EBITDA multiple. The appropriate EV / EBITDA multip..

  Briefly describe the operations of nike

Distinguish managerial accounting from financial accounting, and describe how the information provided by the two systems is used differently.

  What was the taxes due

A huse was purchsed on June 5th. The sales price 179,500 and the buyer obtained a 85% loan. What was the taxes due?

  What are the quotas for a sample of 2,000 readers

What are the quotas for a sample of 2,000 readers? Design a spreadsheet to find the quotas in each category for different sample sizes.

  Find three publicly-traded companies

Find three publicly-traded companies that have relatively high fixed costs and three publicly-traded companies that have relatively low fixed costs. Please report these numbers and the industries these companies are in.

  What do you think the ex-dividend price will be

New IRS regulations require that taxes be withheld at the time the dividend is paid. Palmer sells for $109 per share, and the stock is about to go ex-dividend.

  Find the sustainable and internal growth rates

Find the sustainable and internal growth rates for a firm with the following ratios:asset turnover is 1.40; profit margin=5%; payout ratio=25%; equity/assets=.60

  Primary stakeholders for most npo

Who are the primary stakeholders for most NPOs? Do you think accountability and interperiod equity are more relevant to NPOs than to for-profit organizations? Explain your response.

  How much money do you need to take out each year

If you have 2 million dollars in an account that earns 9% interest compounded continuously and in 30 years you want your account to be empty, how much money do you need to take out each year? (taking the same amount out each year)

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