Reference no: EM131447270
Your firm has been hired to develop new software for the university's class registration system. Under the contract, you will receive $500,000 as an upfront payment. You expect the development costs to be $450,000 per year for the next 33 years. Once the new system is in place, you will receive a final payment of $900,000 from the university 44 years from now. a. What are the IRRs of this opportunity? (Hint: Build an Excel model which tests the NPV at 1% intervals from 1% to? 40%. Then zero in on the rates at which the NPV changes signs.) b. If your cost of capital is 10%, is the opportunity attractive. Suppose you are able to renegotiate the terms of the contract so that your final payment in year 44 will be $ 1.0 million. c. What is the IRR of the opportunity now? d. Is it attractive at the new terms?
A. What are the IRRs of this opportunity ?(Hint: Build an Excel model which tests the NPV at 1% intervals from 1% to? 40%. Then zero in on the rates at which the NPV changes signs.) The IRRs of the project in ascending order are _____% and ______%.? (Round to two decimal places.)
B. If your cost of capital is 10 %, is the opportunity? attractive? If your cost of capital is 10 %
(a)the opportunity is it attractive
(b) is it not attractive
Suppose you are able to renegotiate the terms of the contract so that your final payment in year 4 will be $1.0 million.
C. What is the IRR of the opportunity now (Select the best choice below.)
A. Now there are 3 IRRs.
B. The IRR rule always gives the wrong answer.
C. Now there are no IRRs.
D. The IRR rule works as before.
D. Is it attractive at the new terms? If your cost of capital is 10%, the opportunity______
(a) attractive
(b) is not attractive
|
What is the expected return on this stock
: A stock has a beta of 1.5. The market currently has risk free rate of 4% and the expected return of 12%. What is the current market risk premium? What is the expected return on this stock?
|
|
Arbitration and judicial hearings with particular emphasis
: Discuss the similarities and differences between arbitration and judicial hearings with particular emphasis on the common law of the shop, admission of evidence, and the role of the arbitrator versus that of the judge.
|
|
Discuss about the e-mail based communications
: Create a business impact analysis on SanGrafix a video game design company. The BIA should include a descriptive list of the organization's key business areas. The BIA helps to identify and prioritize critical IT systems and components. A template..
|
|
Real business communication issue
: The purpose of this assessment is to provide students with the opportunity to work collaboratively with colleagues to prepare a group presentation and written report that reflects a real business communication issue.
|
|
Software for the university class registration system
: Your firm has been hired to develop new software for the university's class registration system. Under the contract, you will receive $500,000 as an upfront payment. What is the IRR of the opportunity now? What are the IRRs of this opportunity?
|
|
Draft a brief informal performance appraisal for bridgewater
: Message Strategies: Negative Performance Reviews [LO-7] Elaine Bridgewater, the former professional golfer you hired to oversee your golf equipment company's relationship with retailers, knows the business inside and out.
|
|
Compute the firms total revenue and total cost
: List the assumptions of the perfectly competitive model. Calculate the firm's total revenue (TR), total cost (TC), and profit assuming the firm produces this level of output.
|
|
Characteristics of high formalization in an organization
: What are the characteristics of high formalization in an organization? It's advantages and disadvantages?
|
|
Determine the five equivalent values
: A design-build-operate engineering company in Texas that owns a sizable amount of land plans to lease the drilling rights (oil and gas only) to a mining and exploration company. Utilize engineering economy relations by hand and by spreadsheet to dete..
|