financequiz8 - 1. Question: 1. Blanchford Enterprises is...

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1. Question: 1. Blanchford Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC = 10% Year: 0 1 2 3 4 Cash flows: -$1,000 $475 $475 $475 $475
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Your Answer: $482. 16 $496. 38 $505. 69 C ORR ECT $519. 05 $524. 72
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Instructor Explanatio n: NPV (constant cash flows; 4 years) NPV = -1,000 + 475 / 1.10 + 475 / 1.10 2 + 475 / 1.10 3 + 475 / 1.10 4 NPV = 505.69 Points Received: 4 of 4 Comments : 2. Question: Tapley Dental Associates is considering a project that has the following cash flow data. What is the project's payback? Year: 0 1 2 3 4 5 Cash flows: -$1,000 $300 $310 $320 $330 $340
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Your Answer: 2.11 year s 2.50 year s 2.71 year s 3.05 year s 3.21 year s C ORR ECT
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Explanatio n: Payback period = $300 + $310 + $320 + ($70 / $330) = 3.21 years Points Received: 4 of 4 Comments : 3. Question: Ryngaert Medical Enterprises is considering a project that has the following cash flow and WACC data. What is the project's NPV? Note that a project's projected NPV can be negative, in which case it will be rejected. WACC = 10% Year: 0 1 2 3 4 Cash flows: -$1,000 $400 $405
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This note was uploaded on 08/06/2011 for the course MT 217 taught by Professor Finance during the Spring '11 term at Kaplan University.

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financequiz8 - 1. Question: 1. Blanchford Enterprises is...

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