Find the payback period for this project

Assignment Help Financial Management
Reference no: EM131521792

The Hallmark Cards corporate policy is that all projects must achieve a 6-month simple payback in order to be approved. Given the project cash flows below,

a. find the payback period for this project.

b. what is hallmark's internal rate of return for the project? The MARR is 8%.

Month Expense/ Revenue($)

0 -220,000

1 -15,000

2 40,000

3 80,000

4 100,000

5 150,000

6-8 150,000

Reference no: EM131521792


Write a Review


Financial Management Questions & Answers

  Accumulate money for his down payment

John plans to buy a vacation home in 4 years from now and wants to have saved $59,207 for a down payment. How much money should he place today in a savings account that earns 9.60 percent per year (compounded daily) to accumulate money for his down p..

  Compute the the degree of operating leverage

Northwood Company manufactures basketballs. The company has a ball that sells for $30. At present, the ball is manufactured in a small plant that relies heavily on direct labor workers. Compute the CM ratio and the break-even point in balls. Compute ..

  All transaction-related costs

Grant purchased one call on XYZ stock at an exercise price of $25. The market price of XYZ stock when Grant purchased the call was $24 a share. XYZ is currently priced at $30 a share. Grant paid $120 to buy the call. How much profit will Grant make i..

  Lead in developing a sustainable supply chain

Companies such as IKEA are taking the lead in developing a sustainable supply chain. Watch the video, Let's Go All-In on Selling Sustainability, then read both the Accenture report on, Sustainable Supply Chain Management and the Business Week article..

  Calculate the expected rate of return on risk-free portfolio

Suppose that many stocks are traded in the market and that it is possible to borrow at the risk-free rate, rƒ. The characteristics of two of the stocks are as follows: Stock Expected Return Standard Deviation A 9 % 45 % B 13 % 55 % Correlation = –1 a..

  Identified investments for your hospital in long term

Your firm, Nurse International has identified investments for your hospital in long term, fixed income bonds. Your boss is expecting you to complete a comprehensive, analytical, response to this project (details to follow). Suppose that two years aft..

  Firms credit customers to pay for their purchases

Morning Star has credit sales of $914,900, cost of goods sold of $764,800, average accounts receivable of $121,300, and average accounts payable $127,600. On average how long does it take for the firm's credit customers to pay for their purchases?

  What were the holding period returns of your investment

You purchased 34 shares of common stocks from ABC Corp on Jan 1st, 2000 for $27.45 per share. You sold all the shares on Dec 31st, 2004 for $29.17 per share. ABC Corp distributed annual dividends of $0.05, $0.11, $0.13 per share on Dec 28th, 2000, De..

  Calculate the best-case and worst-case npv figures

We are evaluating a project that costs $1,220,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 88,900 units per year. Price per unit is $35.20,..

  What was your total real rate of return on this investment

Suppose you bought a bond with a coupon rate of 7.5 percent one year ago for $941. The bond sells for $949 today. If the inflation rate last year was 4 percent, what was your total real rate of return on this investment?

  Policies for implementing construction loans

You are in charge of setting policies for implementing construction loans at a bank once the loan officer has approved the borrower's application. (Construction loans finance the development of a structure during the building process and are later co..

  Retailers balk at the high price of the athletic equipment

Your Company sells athletic Uniforms and other sports equipment to retailers in France. Your company of course wants to be paid in US Dollars. Meanwhile the dollar is getting stronger against the Euro every day. The French retailers balk at the high ..

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