Capital Budgeting Problem Set - Building The Pride
Capital Budgeting Problem Set - Building The Pride
Capital Budgeting Problem Set - Building The Pride
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8. Assuming a discount rate of 12% and the following after-tax cash flows:<br />
CF0 CF1 CF2 CF3 CF4 CF5 CF6<br />
- $10,000 6,000 3,000 3,000 -2,000 -1,000 5,000<br />
find the project’s:<br />
NPV ______________ (578.76)<br />
MIRR ______________ (12.89%)<br />
Payback ______________ (2.33 yr.)<br />
Profitability Index ______________ (1.0489)<br />
9. Consider the following cash flows:<br />
CFO CF1 CF2 CF3 CF4 CF5<br />
-$100,000 $34,000 $34,000 -$10,000 $40,000 $50,000<br />
Assuming k=11 percent, calculate the following numbers. If any numbers might be<br />
questionable the find another way to verify the number. Show all your work.<br />
NPV ___________________ ($6,935.68)<br />
IRR ___________________ (13.56%)<br />
Payback ___________________ (4.04)<br />
MIRR ___________________ (12.4%)<br />
PI ___________________ (1.065)<br />
10. You are evaluating a project with the following cash flows:<br />
CFO CF1 CF2 CF3 CF4 CF5<br />
-25,000 6,000 7,000 -4,000 15,000 10,000<br />
Assume a required rate of return of 10%.<br />
Find the NPV? (-311.17)<br />
Find the Payback ? (4.1 yr.)<br />
Should you calculate the project’s IRR? Why or why not?<br />
Find the MIRR? (9.75%)