Calculate the project internal rate of return

Assignment Help Financial Management
Reference no: EM131337110

J. Cena is looking to grow upon an existing project. The expansion requires an immediate outflow of $85 million. J.Cena anticipates the project will generate one future cash flow of $155 million that will arrive at the end of year 6, and only in that year. The company considers the required rate of return of the project to be 10.25%

Calculate the project's internal rate of return:  %

Reference no: EM131337110

Questions Cloud

Identify size of each block of funds and the cost of funds : Identify the size of each block of funds and the cost of the funds in each block. Be sure to identify the maximum amount of funds White can acquire.
What is the optimum fin spacing s : What is the optimum fin spacing S? For this spacing and the prescribed values of t and W, what is the rate of heat transfer from the fins?
Contemplating purchasing new parking system : A town in Florida is contemplating purchasing a new parking system that would enhance the collection of parking fees while providing additional convenience to shoppers. The hardware requires an immediate outflow of $800. What is the payback, in years..
Compute the marginal cost of capital schedule for ml : Matsumoto Limited (ML), a large conglomerate firm, has a capital structure that currently consists of 20 percent long-term debt, 10 percent preferred stock, and 70 percent common equity.- Compute the marginal cost of capital schedule for ML, and de..
Calculate the project internal rate of return : J. Cena is looking to grow upon an existing project. The expansion requires an immediate outflow of $85 million. J.Cena anticipates the project will generate one future cash flow of $155 million that will arrive at the end of year 6, and only in that..
What is the rate of free convection heat transfer : What is the rate of free convection heat transfer per unit surface area between the two plates if they are inclined at an angle of 60° from the horizontal?
What is the minimum rate of return that folske should demand : What is the minimum rate of return that Folske should demand on the equity-financed portion of investments in its industrial products division, assuming these investments continue to be financed with 70 percent equity and 30 percent debt?
What are the independent variables and their levels : What are the independent variables and their levels? What is the dependent variable? State all null hypotheses associated with independent variables and their interaction? Also suggest alternate hypotheses
Project long-term cash flows are expected : A new startup, Mensa, has developed their best available project that will require an immediate outflow (an investment today) of $50875. The project's long-term cash flows are expected to be $23475 per year for 4 consecutive years beginning in one ye..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the value of the portfolio in one year

Madeline Manufacturing Inc.’s current stock price is $40 per share. Call options for this stock exist that permit the holder to purchase one share at an exercise price of $30. After the payoffs have been equalized and the riskless hedged investment i..

  Would you take any action regarding the future

Your own 5,000 acres of farmland in Kansas and grow feed corn, currently selling at $3 per bushel. You expect to harvest about 1000 bushel per acre in August. Would you take any action regarding the future. What instrument would you use?

  What would your portfolio new beta be

Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 0.92. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and use ..

  Calculate the present value of the future cash flow

Calculate the present value of the future cash flow, given the following information: (a) Future Payment: $25,000, (b) Interest Rate: 5%, and (c) Number of Periods: 10.

  Determine the exercise price

The loan implicit in the break forward contract will have a face value of 40.19. Determine if this is a fair amount by using your answer in a and computing the value of K.

  What must be the opportunity cost of capital

A stock sells for $20. The next dividend will be $3 per share. If the return on equity ROE is a constant 10% and the company reinvests 30% of earnings in the firm, what must be the opportunity cost of capital?

  What is the bond coupon rate

Sky Enterprises outstanding bonds have a 25 year maturity and a $1000 par value. Their yield to aturity is 9.25%. They pay coupon payments semiannuallym and they are selling at a price of $850. What is the bond's(annual) coupon rate?

  How the firms earnings and balance sheet would be affected

Explain what accounting entries would be done and how the firm's earnings and balance sheet would be affected. What would be different if it were not an effective hedge?

  Prohibit acquiring firms from using common stock

Regulations in the United States prohibit acquiring firms from using common stock to purchase another firm. Defensive mergers are designed to make a company less vulnerable to a takeover.

  Big stevies is the maker of swizzle sticks

Big Stevie's is the maker of swizzle sticks; they are considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $90,000 and will generate net cash inflows of $21,000 a year for 9 years.

  Decision affect the other elements of working capital

What factors may lead an organisation to change the level of inventories that it holds? How could such a decision affect the other elements of working capital?

  Original payments earn an annual effective interest rate

Chris invests X at the beginning of each year for 8 years. The original payments earn an annual effective interest rate of 5%, but the interest received on the original payments is reinvested at an annual effective interest rate of 3.5%. If Chris has..

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