What is the project modified internal rate of return

Assignment Help Financial Management
Reference no: EM131351643

A project has an initial investment of $1,500,000. If the expected cash inflows from the project are $600,000 in year 1, $342,000 in year 2, $255,000 in year 3, and $375,000 in year 4, what is the project’s payback? If the firm’s hurdle payback rate were 3.5 years, would you accept the project? 4. What is the project’s modified internal rate of return if the cost of capital is 13%. Would you accept this problem?

Reference no: EM131351643

Questions Cloud

What is the required rate of return on LRW stock : LRW Corporation has a beta of 1.0. The risk-free rate of interest is 0.06, and the return on the stock market overall is expected to be 0.12. What is the required rate of return on LRW stock?
What exactly does it mean to be self realized : what exactly does it mean to be Self-Realized, to live a life not identified with the body, with the doer? What would such a life look like, for you and for others?
Explain the youth firearms violence initiative : Explain the Youth Firearms Violence Initiative. Choose one of the strategies and tactics shown in Table 8.2 (p. 246). Explain the program in depth and its effectiveness in reducing juvenile weapons crimes.
The importance of a strong company culture : After viewing the two (2) Lynda.com videos on company culture this week, identify at least three (3) elements of a strong company culture of trust and integrity. Explain why each of these elements is important, and provide an example of each that ..
What is the project modified internal rate of return : A project has an initial investment of $1,500,000. If the expected cash inflows from the project are $600,000 in year 1, $342,000 in year 2, $255,000 in year 3, and $375,000 in year 4, what is the project’s payback? If the firm’s hurdle payback rate ..
What is the mean of the data in the frequency distribution : Find the probability that the mean of the population will be less than one minute from the mean of the sample.
Write a response that addresses the main ideas of the video : View the video about Otto Dix's "The War" triptych held in Dresden (Germany). Then submit a minimum 150 word response that addresses the main ideas and themes.
Informative and persuasive communication : What is the difference between informative and persuasive communication? What kind of presentation would you use to demonstrate each type? in 100 words
Explaining a philosophical account of the nature : write a 3-4 page essay explaining a philosophical account of the nature and existence of God. Finally, compare this philosophical theory to your own religious belief.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the percentage change in price of bond

Both bond A and bond B have 9.8 percent coupons and are priced at par value. Bond A has 9 years to maturity, while bond B has 20 years to maturity. a. If interest rates suddenly rise by 2.4 percent, what is the percentage change in price of bond A an..

  What is initial cash flow of the butterfly spread strategy

Suppose you are creating a butterfly spread using call options with 3 different strike prices. Currently, the call price with strike price of $40 is $22.21, the call with strike price of $50 is $11.62, and the call with strike price of $60 is $5.25. ..

  Understanding of the free cash flow hypothesis

Assess the likelihood that the following firms will be taken over, based upon your understanding of the free cash flow hypothesis.

  Ignoring the effect of taxes-find the financial break-even

Consider a project with the following data: accounting break-even quantity = 10,300 units; cash break-even quantity = 9,500 units; life = six years; fixed costs = $190,000; variable costs = $88 per unit; required return = 10 percent. Ignoring the eff..

  How old shall we be when we attain our goal

We want to become millionaires. Our 10th birthday is today, and our grandparents give us $15,000, which we invest at 5% interest rate. We shall pay for a 4 year bachelor’s from our pocket in 8 years at $30,000 per annum. In year 16, we take a vacatio..

  Calculate the required investment in nowc

Recalculate the NPV assuming the machine press can only be sold for $45,000 at the end of year four. Does this change have an impact on their decision?

  Result in initial aftertax cash savings

Scanlin, Inc., is considering a project that will result in initial aftertax cash savings of $1.86 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt–equity ratio..

  Efficiency cost is term that involves

Efficiency cost is a term that involves

  Portfolio rate-what would cause the portfolio interest rate

When using a portfolio rate, what would cause the portfolio interest rate on a UL to perform better than the market in an extended declining interest rate market and yet would perform worse than the market in an extended increasing interest rate envi..

  Bond outstanding with an annual coupon rate

General Mills has a $1,000 par value, 12-year bond outstanding with an annual coupon rate of 3.60 percent per year, paid semi-annually. Market interest rates on similar bonds are 12.70 percent. Calculate the bond's price today.

  What is the firms after-tax cost of debt

5 years ago, Barton Industries issued 25-year no callable, semi annual bonds with a $1,900 face value and a 10% coupon, semi annual payment ($95 payment every 6 months). The bonds currently sell for $845.87. If the firm's marginal tax rate is 40%, wh..

  Investment in option to be profitable as investment in stock

The price of a stock is $36 and the price of a three-month call option on the stock with a $36 strike is $3.60. Suppose a trader has $3,600 to invest and is trying to choose between buying 1,000 options (10 contracts) or 100 shares of stock. How 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