Nova Southeastern University
H. Wayne Huizenga School
of Business & Entrepreneurship
Assignment for
Course:
Submitted to:
Submitted by:
FIN 5080 APPLYING MANAGERIAL
FINANCE
Piya Chayanuwat, D.B.A.
Zhi
Projects 1 and 2 have similar outlays, although the patterns of future cash flows are different. The cash flows as well as the
For both projects, the required rate of return is 10 percent.
RATE
YEAR
0
You are reviewing a profitable investment project that has a conventional cash flow pattern. Suppose that the
1. the IRR would increase? decrease? stay the same?
2. the NPV would increase? decrease? s
What is NPV, IRR, PI, MIRR of a project with the following cash flows if the discount rate is 14 percent?
Rate
14%
Year
0
1
2
3
4
PV of all FCFs
NPV
IRR
PI
MIRR
CF
-18000
5000
7500
8400
2100
$17,070.1
Assuming that the required rate is12%,what is the Equivalent AnnualAnnuity(EAA)for
RATE
Project A
YEAR
0
1
2
3
4
5
6
12%
CF
($40,000)
$8,000.00
$14,000.00
$13,000.00
$12,000.00
$11,000.00
$10,000.00
N
A project has the following cash flows. What is the payback period?
YEAR
0
1
2
3
4
5
CF
Bal Remaining
($5,000)
($5,000)
$2,700.00
($2,300)
$3,300.00
$1,000
$1,400.00
$330.00
$340.00
Payback Period
-0.
ABC Corporation is considering an investment of 375 million with expected after-tax cash inflows of 115 m
percent.
What is the investments
1. NPV?
2. IRR?
3. MIRR?
4. PI?
5. Payback
Period?
RATE
10%
Y
Chapter 10 mini case
d.
(1) Define the term internal rate of return (IRR). What is each franchises IRR?
IRR is the discount rate that forces the PV of the inflows to equal the initial cost.
The IRR is
d. You should recognize that basing a decision solely on
expected returns is only appropriate for risk neutral individuals.
Since your client, like virtually everyone, is risk averse, the
riskiness of
Luxuan Xie
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Notes:
Real Personal Consumption Expenditures: Nondurable Goods
PCNDGC96
U.S. Department
Financial objectives
An objective set by a company in which the target state is measured in monetary terms,
such as a certain amount of profits, or a certain percentage increase in profits over a
peri
SPRINT 2011
SAMPLE OF COVER PAGE TO BE USED FOR ALL ASSIGNMENTS
Nova Southeastern University
H. Wayne Huizenga School
of Business & Entrepreneurship
Assignment for Course: FIN 5080 APPLYING MANAGERIAL
Financial objectives
An objective set by a company in which the target state is measured in monetary terms,
such as a certain amount of profits, or a certain percentage increase in profits over a
peri
a
equipment
NWCInvestment
initialinvestmentoutlay
$8,000,000
$3,000,000
$11,000,000
b
No,the$50,000expenditureisconsideredasunkcostanddoesnot
representanincrementalcashflow.Hence,itshouldnotbe
Include
Name
ID
XixiLiu
N01533774
F
C
i
r
n
1000
1000
0.09
0.08
12
P
$928.393
C
r
n
F
P
i
1000
0.1
12
1000
850
12.16%
r2
7.11%
r3
8.88%
p
r
n
FaceValue
i
P
0.1
8
1000
0.85
1085.8
n
PV
PMT
FV
r
7
1000
140
1090