Project has annual cash flows

Assignment Help Financial Management
Reference no: EM13879289

A project has annual cash flows of $3,500 for the next 10 years and then $7,000 each year for the following 10 years. The IRR of this 20-year project is 11.59%. If the firm's WACC is 9%, what is the project's NPV? Round your answer to the nearest cent.

Reference no: EM13879289

Questions Cloud

Carl patterson likes investing in stocks that pay dividends : Carl Patterson likes investing in stocks that pay dividends. Carl owns 115 shares of a local utility company. The stock pays a regular annual dividend in the amount of $5.25 per share and the company has indicated that the dividend will stay the same..
Determine swaption payoff at expiration : Which of the following is not required to determine a swaption payoff at expiration?
Interest rate call option at the maturity of a loan : Determine the value of an interest rate call option at the maturity of a loan if the call has a strike of 12 percent, a face value of $50 million, the loan matures 90 days after the call is exercised, the call expires in 60 days, the call premium is ..
Find the net payment on an equity swap : Find the net payment on an equity swap in which party A pays the return on a stock index and party B pays a fixed rate of 6 percent. The notional amount is $10 million. The stock index starts off at 1,000 and is at 1,055.15 at the end of the period. ..
Project has annual cash flows : A project has annual cash flows of $3,500 for the next 10 years and then $7,000 each year for the following 10 years. The IRR of this 20-year project is 11.59%. If the firm's WACC is 9%, what is the project's NPV?
Calculate the present value of the cash flows discounted : Calculate the present value of the following cash flows discounted at 10 percent.
Project that will result in initial after tax cash savings : Och, Inc., is considering a project that will result in initial after tax cash savings of $1.71 million at the end of the first year, and these savings will grow at a rate of 1 percent per year indefinitely. What is the maximum initial cost the compa..
What interest rate on the new debt is the NPV : Start with the partial model in the file Ch18 P08 Build a Model.xls on the textbook’s Web site. Schumann Shoe Manufacturer is considering whether or not to refund a $70 million, 10% coupon, 30-year bond issue that was sold 8 years ago. Conduct a comp..
What is the growth rate of the dividends : Alexis owns stock in a company which has consistently paid a growing dividend over the last 10 years. The first year Alexis owned the stock, she received $4.50 per share and in the 10th year, she received $4.92 per share. What is the growth rate of t..

Reviews

Write a Review

Financial Management Questions & Answers

  Annualized interest rates-inflation rate

A 150% local currency return in Brazil is higher than a 15% dollar return in the U.S. If annualized interest rates in the U.S. and Sweden are 9% and 13%, respectively, and the spot value of the Swedish krona is $.1090, then at what 180 day forward ra..

  What is the future value of an annuity

What is the future value of an annuity of $3,277.87 per year for 49 years if the annually compounded interest rate is 13.38%?

  What is the required return on the companys stock

Raffalovich, Inc., is expected to maintain a constant 5.6 percent growth rate in its dividends, indefinitely. If the company has a dividend yield of 4.1 percent, what is the required return on the company’s stock?

  Measure to use for measuring the risk of a random variable

The best measure to use for measuring the risk of a random variable would be:

  What is securitization

What is securitization? Answer in the context of the roles of financial markets; (i) liquidity, (ii) price discovery, and (iii) ease of transactions.

  What is the bond equivalent yield

A U.S. Treasury bill with 89 days to maturity is quoted at a discount yield of 4.17 percent. What is the bond equivalent yield?

  Investment opportunity promises a stated interest rate

If interest rates are positive, the present value of a future lump sum of $100 will be. An investment opportunity promises a stated interest rate of 6 percent with semi-annual compounding. Which of the following statements is most correct?

  Investment that generates the cash flows

You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 10.6 percent, compounded annually.

  Considered to be the least risky

Which of the following are considered to be the least risky?

  What is the yield-to-maturity of this bond

Duke Power has a 10 year, 5.5% coupon bond that is currently selling for $1,033.15. Assume that coupon payments are semi-annual. What is the yield-to-maturity of this bond?

  Performing in the areas of profit-debt and asset turnover

Compare and contrast the two companies in terms of how well or how poorly they are performing in the areas of profit, debt, and asset turnover. Use appropriate ratios in your analysis. Indicate strategies for possible improvement in each area. the co..

  Prepare contribution format income statement for the year

Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $200. What is the company’s break-even point in terms of the number of barbecue grills sold? Assume that the company uses variable costing. Compute..

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