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# Calculate the Net Present Value (NPV) of the following cash flow stream if the required rate is 12%:

Calculate the Net Present Value (NPV) of the following cash flow stream if the required rate is 12%:

Year Cash Flow

0 (230,000)

1 60,000

2 60,000

3 60,000

4 60,000

5 60,000

Is this a good project for the business to accept?  Explain why or why not.

(2)

Calculate the Net Present Value (NPV) of the following cash flow projections based on a  required rate of 10.5%:

Year Cash Flow

0 (120,000)

1 35,000

2 47,500

3 55,000

4 62,000

Is this a good project for the business to accept?  Explain why or why not.

(3)

Project A

Year Cash Flow

0 -800,000

1 220,000

2 265,000

3 292,000

4 317,000

Project B

Year Cash Flow

0 -650,000

1 175,000

2 175,000

3 175,000

4 175,000

5 175,000

(4)

Calculate the internal rate of return (IRR) of the following cash flows:

Year Cash Flow

0 (1,650,000)

1 330,000

2 365,000

3 380,000

4 415,000

5 405,000

6 370,000

7 294,000

(5)

If a company has a required rate of return of 15%, should the following project be accepted based on these expected cash flows below?

Year Cash Flow

0 (274,000)

1 68,000

2 73,000

3 76,500

4 78,000

5 82,500

6 77,000

Please explain why or why not the company should move forward with this endeavor.

(6)

Based on the investor expectations of earning at least 12%, should this projected below be completed?

Year Cash Flow

0 (133,000)

1 37,000

2 42,750

3 44,000

4 46,500

5 82,500

6 77,000

Please explain why or why not the company should move forward with this endeavor.

According to NPV , a project should be accepted only when the present value of cash inflow is equal to or more than the... View the full answer

Net Present Value (NPV) NPV shows the present value of all the cash inflows and outflows over a... View the full answer

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