Considering a project with an initial cost

Assignment Help Financial Management
Reference no: EM13885130

The Dry Dock is considering a project with an initial cost of $118,400. The project’s cash inflows for years 1 through 3 are $37,200, $54,600, and $46,900, respectively. What is the IRR of this project?

Reference no: EM13885130

Questions Cloud

What is the after-tax cost of debt capital : A corporate bond has a face value of $1,000 and a coupon rate of 5%. The bond matures in 15 years and has a current market price of $950. If the corporation sells more bonds it will incur flotation costs of $25 per bond. If the corporate tax rate is ..
Small business maximize tax-deferred savings : Discuss all of the following statements and state why you agree or disagree with each of them individually. A defined benefit plan can help an older controlling employee in a small business maximize tax-deferred savings. The Internal Revenue Code set..
What is the best estimate of stocks current intrinsic price : Decker Tires’ free cash flow for the current year equals $1.32 million. Analysts expect the company's free cash flow to grow by 30% next year, by 10% in the year after that, and at a constant rate of 5% thereafter. The WACC for this company 9.00%. De..
Accept or reject the project based on this index value : A project has cash flows of -$152,000, $60,800, $62,300 and $75,000 for years 0 to 3, respectively. The required rate of return is 13 percent. What is the profitability index? Should you accept or reject the project based on this index value?
Considering a project with an initial cost : The Dry Dock is considering a project with an initial cost of $118,400. The project’s cash inflows for years 1 through 3 are $37,200, $54,600, and $46,900, respectively. What is the IRR of this project?
What is the current value of one share of stock : AC Electric just paid a $2.10 per share annual dividend. The firm pledges to increase its dividend by 2.4 percent for the next 5 years and then maintain a constant 2 percent rate of dividend growth. If the required return is 15 percent, what is the c..
Shares when you can afford to make this investment : The UpTowner just paid a $3.45 annual dividend. The company has a policy of increasing the dividend by 4.5 percent annually. You would like to purchase 100 shares of stock in this firm but realize that you will not have the funds to do so for another..
Fast growing technology company : Starskeep, Inc., is a fast growing technology company. The firm projects a rapid growth of 40 percent for the next two years and then a growth rate of 20 percent for the following two years. After that, the firm expects a constant-growth rate of 8 pe..
Sees no growth in it for the foreseeable future : Xinhua Manufacturing Company has been generating stable revenues but sees no growth in it for the foreseeable future. The company's last dividend was $3.25, and it is unlikely to change the amount paid out. If the required rate of return is 12 percen..

Reviews

Write a Review

Financial Management Questions & Answers

  Value of a european call option with an exercise price

A stock currently sells for $50. In six months, it will either rise to $55 or decline to $45. The risk-free interest rate is 6% per year. Find the value of a European call option with an exercise price of $50. Find the value of a European put option ..

  What is its current price

A stock is expected to pay a dividend of $0.75 at the end of the year. The required rate of return is 12.5%, and the expected constant growth rate is g = 8.5%. What is its current price?

  What was the growth rate in earnings per share

10 years ago, Weed Go Inc. earned $0.53 per share. Its earnings this year were $4.58. What was the growth rate in earnings per share (EPS) over the 10-year period? State your answer as a percentage to two decimal places (e.g. 16.38%). The % sign is n..

  Calculates the value of a firms common stock

Utilizing the free cash flow approach calculates the value of a firm's common stock given the following information:

  Changes working capital policies to improve cash flow cycle

Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $120,000 (all on credit), and it earned a net profit of 7%. What would Strickler's ROA have been if the inven..

  Addition to price-weighted and value-weighted indexes

In addition to price-weighted and value-weighted indexes, an equally weighted index is one in which the index value is computed from the average rate of return of the stocks comprising the index.

  What conditions are remittances significant contributors

Under what conditions are remittances significant contributors to the economy and overall balance of payments?

  Difference in annual inflation rates

Suppose the spot and three-month forward rates for the yen are 79.75 and 79.08, respectively. What would you estimate is the difference between the annual inflation rates of the United States and Japan? (Negative amount should be indicated by a minus..

  Functioning of the financial reporting system

Objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions

  What is the future value of an ordinary annuity

What is the future value of an ordinary annuity of $1,000 per year for 7 years compounded at 10%? What would be the future value if it were an annuity due?

  About the after-tax cost of debt without flotation cost

The Heuser Company's currently outstanding bonds have a 10% coupon and a 13% yield to maturity. Heuser believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40%, what is Heuser's after-ta..

  What is the value of the tax shield generated by this bond

You borrow $11M by issuing a par-value bond that has a 10-year maturity, promises an annual coupon payment of 5 percent, and has a face value of $10M. The expected return on this bond is also 5 percent. What is the value of this bond, as determined b..

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