Calculate the projects payback period, Financial Management

Assignment Help:

Project Z has a cost of $ 50,000.00, its expected net cash flows are $11,000 per year for 8 years, and its cost of capital is 12 % (Hint: begin by constructing a time line).

Instructions:

a. Calculate the project's payback period.
b. Calculate the project's discounted payback period.
c. Calculate the project's NPV.
d. Given that IRR for project Z = 15%, compared to another project; project B that has IRR= 18%? Evaluate project Z.

You plan to invest your money in a project that has the following set of cash flows?

Year Cash Flows

0 -$2,500
1 300
2 1,500
3 1,100
4 1,000

a. Calculate the project's payback period.
b. Calculate the project's discounted payback period given that cost of capital is 12 %.
c. Calculate the project's NPV.
d. According to the results in the previous sections; will you invest your money in the project? Explain.


Related Discussions:- Calculate the projects payback period

Explain speculator - market participants, Explain Speculator - Market Parti...

Explain Speculator - Market Participants A speculator attempts to profit from a modification in the futures price. For doing this, the speculator will take a long or short posi

Reforms and outlook, Reforms and Outlook Pension funds in India is an a...

Reforms and Outlook Pension funds in India is an area that is yet to be fully explored compared to those of other economies of the world. The pension reforms are expected to fa

Observation of capital structure, Q. Observation of capital structure? ...

Q. Observation of capital structure? Droxfol Co has long-term funding provided by ordinary shares preference shares and loan notes. The rate of return necessary by each source

State the term- adequate working capital, State the term- adequate working ...

State the term- adequate working capital If a firm doesn't have adequate working capital, that is, it doesn't invest sufficient funds in current assets, it can become illiquid

Homework, Assume Main Street Store’s Net Sales in 2010 were $1,000,000 and ...

Assume Main Street Store’s Net Sales in 2010 were $1,000,000 and it’s Net Income in 2010 was $17,000. Thus, between 2010 and 2011 Main Street Store’s net sales increased 20%. Durin

Market segmentation of the term structure of interest rates, Define the mar...

Define the market segmentation of the term structure of interest rates. Market segmentation: And also the investors’ expectations regarding future interest rates and thei

Lockbox system, how do we compute for benefits can derrive out of using loc...

how do we compute for benefits can derrive out of using lockbox system?

Scope of the content of the finance function, Q. Scope of the content of th...

Q. Scope of the content of the finance function? 1) Estimating of the finance requirement: the first task of a finance manager is to estimate and short terms and long terms fin

Matching or accrual, Matching or Accrual   The accrual concept makes...

Matching or Accrual   The accrual concept makes a distinction among the receipt of cash and the right to receive it, and the payment of cash and legal obligation to pay it.

Fm, challenges that the finance manager face in fulfilling the managerial f...

challenges that the finance manager face in fulfilling the managerial function

Write Your Message!

Captcha
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