Explain what is the npv of this project

Reference no: EM13297433

Imagine that Company ABC is considering a project that would cost $100 million today, and provide an estimated $25 million of incremental, net cash flow each year for the next six years. a. What is the Payback Period for this project? b. What is the NPV of this project, if the discount rate is 8.6%? Should the firm accept this project? c. What is the IRR of this project? Should the firm accept this project?

Reference no: EM13297433

Questions Cloud

How much must the grandfather put into ed trust today : Steve and Ed are cousins who were both born on the same day, and both turned 25 today. Their grandfather began putting $2,500 per year into a trust fund for Steve on his 20th birthday, and he just made a 6th payment into the fund.

What is the effective stress 20feet deep for specific weight : Effective stress is defined as the overburden soil pressure less the buoyancy effect of water. What is the effective stress 20 feet deep if the specific weight of the dry soil is 113 pcf and the water table is 11 feet deep

Aluminum reacts with chlorine gas to form aluminum chloride : Aluminum reacts with chlorine gas to form aluminum chloride via the following reaction: \rm 2Al}+3Cl_2rightarrow2AlCl_3 What is the maximum mass of aluminum chloride that can be formed when reacting 26.0g of aluminum

Obtain the magnification of the microscope : A microscope has an objective lens with a focal length of 2.0cm, an eyepiece with a focal length of 0.25 cm, What is the magnification of the microscope

Explain what is the npv of this project : a. What is the Payback Period for this project? b. What is the NPV of this project, if the discount rate is 8.6%? Should the firm accept this project? c. What is the IRR of this project? Should the firm accept this project?

How large will your retirement account be in 31 years : You are to make monthly deposits of $800 into a retirement account that pays 9.8 percent interest compounded monthly. Required: If your first deposit will be made one month from now, how large will your retirement account be in 31 years?

Derive an equation for concentration of a chemical in a lake : Account for chemical reactions, groundwater flows, streams, precipitation, evapotranspiration. Indicate any assumptions that can be made to simplify your equation.

What will be the price of a pair of shoes in the u.s. : Now, suppose that—in addition to the 20% tariff (per pair) on imported shoes—the U.S. also imposes a 10% tariff on the imported components used by the shoe industry to make each pair of shoes. What is the effective rate of tariff protection (ERTP) fo..

Calculate the profit of bill straddle strategy : Calculate the profit (loss) of Bill's straddle strategy if three months later, the price of ABC stock is 0, $12, $25, $38, and $50, respectively.

User Account

All Pages