Firm evaluates all of projects by using npv decision rule

Assignment Help Financial Management
Reference no: EM13728499

A firm evaluates all of its projects by using the NPV decision rule. At a required return of 12 percent, the NPV for the following project is $ ________ and the firm should accept the project. At a required return of 31 percent, the NPV is $ ________ and the firm should reject the project. (Do not include the dollar signs ($). Negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places (e.g., 32.16))

Year     Cash Flow

0       -$30,000

1         21,000

2         16,000

3          9,000

Reference no: EM13728499

Questions Cloud

What extent does business dominate industry policy : what extent does business dominate industry policy in Australia? Discuss, using examples and drawing upon the concepts taught in this unit.
Risk-free rate of return and expected return on the market : The beta of M Simon Inc., stock is 1.3, whereas the risk-free rate of return is 0.08. If the expected return on the market is 0.14, then what is the expected return on M Simon Inc?
The prairie dog has always been considered a problem : The prairie dog has always been considered a problem for American cattle ranchers. They dig holes that cattle andhorses can step in, and they eat grass necessary for cattle. Recently, ranchers have discovered that there is a demandfor prairie dogs as..
What is his or her occupation : Describe who this person is demographically and their core values. What is his or her occupation? What unmet needs is the company fulfilling? Do you think it worked
Firm evaluates all of projects by using npv decision rule : A firm evaluates all of its projects by using the NPV decision rule. At a required return of 12 percent, the NPV for the following project is $ ________ and the firm should accept the project. At a required return of 31 percent, the NPV is $ ________..
Organizational effectiveness in organizational structures : A moderator is a qualitative (e.g., sex, race, class) or quantitative (e.g., level of reward) variable that effects the direction and/or strength of the relation between an independent...variable and a dependent...variable" to acquire Organization..
Annual cash flows-indifferent in accepting project-rejecting : A project that provides annual cash flows of $12,300 for 9 years costs $70,836 today. If the required return is 3 percent, the NPV for the project is $ _________ and you would accept the project. At a discount rate of _________ percent, you would be ..
What general pricing approaches have airlines pursued : What general pricing approaches have airlines pursued, How do the nature of the airline market and the demand for airline service affect Southwest's decisions
Calculate the economic life in mscf per month : Calculate the Economic Life in Mscf per month for a gas lease with WI = 100%, NRI = 87.5%, condensate price = $15/STB, gas price = $2.25/Mscf, condensate yield = 5 STB/Mscf, gas and severance tax (each) = 4.5%. Assuming that ad valorem tax is negligi..

Reviews

Write a Review

Financial Management Questions & Answers

  You have been hired in the finance department at a large

you have been hired in the finance department at a large metropolitan for-profit hospital. your duties are very

  What is the cost of common equity

Summerdahl Resorts' common stock is currently trading at $32.00 per share. The stock is expected to pay a dividend of $1.75 a share at the end of the year (D1 = $1.75), and the dividend is expected to grow at a constant rate of 6% a year. What is the..

  Discounted cash flow estimate of the projects npv

Huntsman Chemical is a relatively small chemical company located in Port Arthur, Texas. The firm’s management is contemplating its first international investment, which involves the construction of a petrochemical plant in São Paulo, Brazil. The prop..

  Interest or discount rate with interest compounded annually

What is the present value of $7,800 received 13 years from now using a 16% interest or discount rate, with interest compounded annually?

  Considering a project with an initial outlay

East Coast Television is considering a project with an initial outlay of $X (you will have to determine this amount). It is expected that the project will produce a positive cash flow of $52,000 a year at the end of each year for the next 16 years. T..

  Stephenson real estate recapitalization stephenson

STEPHENSON REAL ESTATE RECAPITALIZATION Stephenson Real Estate Company was founded 25 years ago by the current CEO, Robert Stephenson. The company purchases real estate, including land and buildings, and rents the property to tenants. The company has..

  Questiongabriel plc has an annual turnover of rs 3 million

questiongabriel plc has an annual turnover of rs 3 million and a pre-tax profit of rs 400000. it is not quoted on a

  Should fuelsource recognize a provision

Should FuelSource recognize a provision as of December 31, 20X1, (1) in reporting to itsU.K. parent under IFRSs and (2) in reporting to its U.S.-based lender in accordance withU.S. GAAP?

  Economic life using the straight-line method

Howell Petroleum is considering a new project that complements its existing business. The machine required for the project costs $3.81 million. The marketing department predicts that sales related to the project will be $2.51 million per year for the..

  Tech industries regarding the proposed new production line

Tech Industries, a contract manufacturer of circuit boards, is evaluating an investment in a new production line to handle the growing demand from its customers, who produce consumer electronic products. Based on reasonable growth assumptions, the NP..

  The equivalent uniform annual cost of the equipment

A manufacturer purchased 12,000 worth of equipment with a life of 10 years. Assuming 9% interest, the equivalent uniform annual cost of the equipment is?

  Other companies for synergies or grow internally

Should Microsoft increase growth by acquiring other companies for synergies or grow internally? Do they have the infrastructure to grow internally? If they get acquired by a competitor, how will the merger be integrated in regards to culture, overlap..

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