Net present value of project that requires net investment

Assignment Help Financial Management

Reference no: EM13941127

What is the net present value of a project that requires a net investment of $59,000 and produces net cash flows of $19,000 per year for 7 years? Assume the cost of capital is 15 percent.

Select one: a. $ 20,047 b. $ 15,520 c. $ 19,000 d. $59,000

Show calculations using Excel.

Reference no: EM13941127

Questions Cloud

Relationship between the internal rate of return : What is the relationship between the Internal Rate of Return, Profitability Index, and Net Present Value. Will they lead to the same acceptance or rejection of a decision?

Equired rate of return on projects of this risk class : Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistic for the pro..

What is the relationship between the net present value : What is the relationship between the Net Present Value and the Profitability Index? Will they lead to the same conclusion? Why or why not?

Determine the discounted payback period for the project : An investment project requires a net investment of $100,000. The project is expected to generate annual net cash inflows of $25,000 for the next 5 years. The firm's cost of capital is 12 percent. Determine the payback period for the project. An inves..

Net present value of project that requires net investment : What is the net present value of a project that requires a net investment of $59,000 and produces net cash flows of $19,000 per year for 7 years? Assume the cost of capital is 15 percent.

What is its after tax WACC : All city Inc. is financed 40% with debt, 10% with proffered stock, and 50% with common stock. its pretax cost of debt is 6%, its proffered stock pays an annual dividend of $2.50 and is priced at $30. it has an equity beta of 1.1. Assume the risk free..

Perfect capital market-leverage affect cost of eqyity : In perfect capital markets, how does the choice of leverage impact firm value? Which of the following is true about agency considerations in finding the optimal capital structure for a firm? In perfect capital markets, how does leverage affect the co..

How much will you pay for the companys stock today : Caan Corporation will pay a $3.56 per share dividend next year. The company pledges to increase its dividend by3.75 percent per year indefinitely. If you require a return of 11 percent on your investment, how much will you pay for the company's stock..

Estimate of slow n steadys cost of equity capital : Slow n' steady Inc, has a stock price of $30, will pay a dividend next year of $3, and has expected dividend growth of 1% per year. what is your estimate of slow n steady's cost of equity capital?

User Account

All Pages