Determine the internal rate of return? for the project

Assignment Help Financial Management
Reference no: EM131575624

Benson Designs has prepared the following estimates for a? long-term project it is considering. The initial investment is ?$36,150 and the project is expected to yield? after-tax cash inflows of ?$8,000 per year for 7years. The firm has a cost of capital of 8?%.

a. Determine the net present value? (NPV) for the project.

b. Determine the internal rate of return? (IRR) for the project.

c. Would you recommend that the firm accept or reject the? project?

Reference no: EM131575624

Questions Cloud

What will your rate of return : What will your rate of return be if you sell your shares one year from now for $37 a share?
What is the price of a treasury strips : What is the price of a Treasury STRIPS with a face value of $100 that matures in 11 years and has a yield to maturity of 9.5 percent?
Organization demonstrates commitment to integrity and values : COSO Framework Components and Principles #1 is “The organization demonstrates a commitment to integrity and values.”
Cash flows associated with the proposed replacement : Covol Industries is developing the relevant cash flows associated with the proposed replacement of an existing machine tool with a? new,
Determine the internal rate of return? for the project : Determine the net present value? (NPV) for the project. Determine the internal rate of return? (IRR) for the project.
Benefits of further education worth the associated costs : Are the benefits of further education worth the associated costs?
What is the price of treasury strips with a face value : What is the price of a Treasury STRIPS with a face value of $100 that matures in 11 years and has a yield to maturity of 9.5 percent?
Are benefits of further education worth associated? costs : Are the benefits of further education worth the associated? costs?
Adjustable-rate mortgage-what is monthly mortgage payment : A 30 year adjustable-rate mortgage (ARM) was taken with the initial terms: What is the monthly mortgage payment and how much would you owe after 60 payments?

Reviews

Write a Review

Financial Management Questions & Answers

  Marginal tax rate on ordinary income

Jaron’s marginal tax rate on ordinary income is 33 percent and 15 percent on dividend income.

  An inflation-indexed treasury bond-total interest payments

An inflation-indexed Treasury bond has a par value of $5,000 and a coupon rate of 7 percent. What are total interest payments investor will receive during year

  What is the net present value of the worst-case scenario

The Meldrum Co. is analyzing a proposed project. What is the net present value of the worst - case scenario?

  Is average private value equal to expected painting value

Is the average private value equal to the expected painting value? - What should be your absolute maximum bid before you expect to lose money?

  What was the annual ytm on that bond

Eight years ago you purchased a $1,000 30-year zero coupon bond for $575. What was the annual YTM on that bond at that time using (a) annual compounding; and (b) semiannual compounding?

  Interest rate risk-market risk-credit risk-currency risk

Explain the following financial risks: interest rate risk, market risk, credit risk, and currency risk. How would a global insurance company, for example John Hancock, possibly manage each one of these risks; provide current assumptions and figures i..

  What is the percentage of shares required by new investors

Suppose a company has a pre-IPO value of $50 million, has 2 million existing shares, needs $9.7 million in net proceeds, and the investment charges a 6% spread. What is the percentage of shares required by new investors?

  What will the dividend be in year three

What will the dividend be in year three? What will the share value be in year four?

  Judging by prior experience and statistics on new restaurant

A U.S. chain of upscale seafood restaurants is considering a new market in SouthEastern Asia, focusing on three potential locations. The market analysis revealed that the revenues. Judging by prior experience and statistics on new restaurants, it has..

  What does the acronym camels refer to

What does the acronym CAMELS refer to in commercial bank examinations? What are the most important facets of an examination?

  A stock is expected to pay an annual dividend

A stock is expected to pay an annual dividend of $4 each year into the indefinite future. Rates of return on equally ricky assets are 5% (.05). The stock price is $100. Is there a bubble on this stock? How do you know? How big is the bubble?

  Find the maximum loss and the break-even point

Assume you sell a European call option on AUD100,000 (AUD = Australian Dollar). The strike price is X(USD/AUD)=0.72 (USD = U.S. Dollar), the maturity is one year, and the premium is 5 cents per AUD. Find the maximum loss and the break-even point S(US..

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