### Calculation of npv & irr of uneven cash flows

Assignment Help Finance Basics
##### Reference no: EM1311000

Calculation of NPV & IRR of uneven Cash Flows and Comparing NPV & IRR between two Investment options.

1. T. Ward and Company has been presented with an investment opportunity which will yield end-of-year cash flows of \$300,000 per year in Years 1 through 4, \$350,000 in Years 5 through 9, and \$400,000 in Year 10. This investment will cost TW & C \$1,500,000 today; its cost of capital is 10%.

Calculate the NPV of this proposed investment.

2. Davis Industries must choose between a gas-powered and electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will only choose one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost \$22,000, whereas the gas-powered truck will cost \$17,500. The cost of capital for both is 12 %. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric truck will be \$6290 per year and for the gas truck, \$5000 per year. Annual net cash flows include depreciation. Calculate the NPV and IRR for each truck, and decide which to recommend.

#### Questions Cloud

 Centripetal force on the motorcycle : Calculate the centripetal force on the motorcycle. Discuss centripetal acceleration, and the speed by a ball : Discuss briefly centripetal acceleration, the speed and the force exerted by a ball attached to a string. Calculation of after-tax cost of debt and cost of equity : Calculation of After-Tax Cost of Debt and Cost of Preferred Stock and Cost of Equity and WACC under CAPM Valuation of free cash flows and value of the firm : Valuation of Free Cash Flows and Value of the Firm using Constant Growth Model Calculation of npv & irr of uneven cash flows : Calculation of NPV & IRR of uneven Cash Flows and Comparing NPV & IRR between two Investment options. Acceleration of an object moving on a circular track : What is the Acceleration of an object moving on a circular track Calculation of modified internal rate of return : Calculation of Modified Internal Rate of Return [MIRR] of even cash flows and You have calculated a cost of capital of 12% for ASI Calculation of after-tax cost of debt and calculate rcs wacc : Calculation of After-Tax Cost of Debt and Calculate RC's WACC and Calculate RC's cost of preferred stock Calculation of rate of return using pure expectations theory : Calculation of Rate of Return using Pure Expectations Theory and calculation of real risk-free rate of return

### Write a Review

#### Determining firm-s quality initiatives

Do you believe this firm’s quality initiatives have been successful? Make sure to give explanation for your opinion with specific information.

#### Computation of price of the bonds

Computation of Price of the bonds and What is an estimate of the price of the annual coupon bond

#### Trade with government of the oil producing nation

In trade with government of the oil producing nation. Callaghan Motors' bonds have ten years remaining to maturity.

#### Computation of equity capital contribution

Computation of equity capital contribution and Before Tax Cash Flow and After Tax Cash Flow and What is the Before-tax Cash Flow to the equity investor

#### How to do analysis of financial performance using financial

How to do Analysis of Financial performance using financial ratios and Compare and contrast the financial performance of the two companies

#### Computation of yield to maturity when interest is paid

Computation of yield to maturity when interest is paid and compounded annually and bond's rate of return earned

#### Determining the portfolio beta

You own the portfolio invested= 27.03% in Stock A, 16.48% in Stock B, 14.48% in Stock C, and remainder in Stock D. Beta of these 4 stocks are 0.76, 1.08, 0.66, and 1.1. Determine the portfolio beta?

#### Computing the percentage returns

Assume a stock had the initial price of= \$65.3 per share, paid the dividend of \$4 per share in the year, and had the ending share price of=\$107.67. Compute the percentage returns?

#### Prepare the pro forma cash flow statements

Prepare the pro forma cash flow statements for Bloomington Clinics

#### Compute degree of operating leverage and combined leverage

Compute Degree of operating leverage and combined leverage & financial leverage and interpreting these values.

#### Calculation of computation of projected cash

Calculation of Computation of projected Cash and How does this information affect your recommendation

#### Case analysis on how to expenditure the advanced payments

Case Analysis on how to expenditure the advanced payments for convention related loss against budgets