optionals - chap 9

optionals - chap 9 - 9 Use the following information to...

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9 Use the following information to answer questions 1 through 3. You are analyzing a proposed project and have compiled the following information: Year Cash flow 0 -$145,000 1 $ 33,400 2 $ 70,500 3 $ 82,100 Required payback period 3 years Required return 9.50 percent ________ 1. What is the net present value of the proposed project? a. $6,239.12 b. $6,831.84 c. $8,221.29 d. $8,376.91 _ ________ 2. Should the project be accepted based on the internal rate of return (IRR)? Why or why not? a. no; The project IRR is greater than the required return. b. no; The project IRR is greater than zero. c. yes; The project IRR is greater than the required return. d. yes; The project IRR is equal to zero. ________ 3. Should the proposed project be accepted based on the payback period? Why or why not? a. yes; The payback period is greater than the required payback period. b. yes; The payback period is less than the required payback period. c. no; The payback period is greater than the required payback period.
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This note was uploaded on 06/27/2008 for the course FINC 450 taught by Professor Ddavidson during the Spring '08 term at Loyola Chicago.

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optionals - chap 9 - 9 Use the following information to...

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