FIN assignment 6.docx - Students Name Thao Thach Tran ID...

This preview shows page 1 - 5 out of 10 pages.

Student’s Name: Thao Thach TranID: 1490321FIN 3331 – ASSIGNMENT 611-1 NPV Project K costs $52,125, its expected net cash inflows are $12,000 per year for 8 years, and its WACC is 12%. What is the project’s NPV?
11-4 PAYBACK PERIOD Refer to Problem 11-1. What is the project’s payback?
payback? Project K’s discounted payback period is calculated as follows:Annual Discounted @12%Period Cash Flows Cash Flows Cumulative0 ($52,125) ($52,125.00) ($52,125.00)1 12,000 10,714.80 (41,410.20)2 12,000 9,566.40 (31,843.80)3 12,000 8,541.60 (23,302.20)4 12,000 7,626.00 (15,676.20)5 12,000 6,808.80 (8,867.40)6 12,000 6,079.20 (2,788.20)7 12,000 5,427.60 2,639.408 12,000 4,846.80 7,486.20The discounted payback period = 6 + $2,788.2/$5,427.6 = 6.51 years.11-6 NPV Your division is considering two projects with the following net cash flows (in millions): a.What are the projects’ NPVs assuming the WACC is 5%? 10%? 15%?Project A: Using a financial calculator, enter the following:
Project B: Using a financial calculator, enter the following:
b.What are the projects’ IRRs at each of these WACCs?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture