# A proposed project requires an initial cash outlay of

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Chapter 10 / Exercise 12
Corporate Finance: A Focused Approach
Brigham/Ehrhardt
Expert Verified
54. A proposed project requires an initial cash outlay of \$749,000 for equipment and an additional cash outlay of \$48,500 in year one to cover operating costs. During years 2 through 4, the project will generate cash inflows of \$354,000 a year. What is the net present value of this project at a discount rate of 16 percent? A. -\$105,427 B. -\$41,209 C. \$67,333 D. \$128,612 E. \$239,602
AACSB: Analytic Bloom's: Analysis Difficulty: Basic Learning Objective: 08-04 Evaluate proposed investments by using the net present value criterion. Section: 8.1 Topic: Net present value 8-30
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Chapter 10 / Exercise 12
Corporate Finance: A Focused Approach
Brigham/Ehrhardt
Expert Verified
Chapter 08 - Net Present Value and Other Investment Criteria 55. Curtis is considering a project with cash inflows of \$918, \$867, \$528, and \$310 over the next four years, respectively. The relevant discount rate is 11 percent. What is the net present value of this project if it the start up cost is \$2,100?
AACSB: Analytic Bloom's: Analysis Difficulty: Basic Learning Objective: 08-04 Evaluate proposed investments by using the net present value criterion. Section: 8.1 Topic: Net present value 56. Charles Henri is considering investing \$36,000 in a project that is expected to provide him with cash inflows of \$12,000 in each of the first two years and \$18,000 for the following year. At a discount rate of zero percent this investment has a net present value of _____, but at the relevant discount rate of 17 percent the project's net present value is _____.
AACSB: Analytic Bloom's: Analysis Difficulty: Intermediate Learning Objective: 08-04 Evaluate proposed investments by using the net present value criterion. Section: 8.1 Topic: Net present value 8-31
Chapter 08 - Net Present Value and Other Investment Criteria 57. Joe and Rich are both considering investing in a project with the following cash flows. Joe is content earning a 9 percent return but Rich desires a return of 16 percent. Who, if either, should accept this project?
AACSB: Analytic Bloom's: Analysis Difficulty: Intermediate Learning Objective: 08-04 Evaluate proposed investments by using the net present value criterion. Section: 8.1 Topic: Net present value 8-32
Chapter 08 - Net Present Value and Other Investment Criteria