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A firm is considering a project that has an initial investment of $40,000 and is expected to produce cash inflows of $7,500 per year for 8 years. The firm’s cost of capital is 12.3%.

1b.What is the project’s payback period? If the hurdle rate is 5 years, should the project be accepted?

1c.What is the project’s NPV? Based on this, should the project be accepted?

1d.What is the project’s PI? Based on this, should the project be accepted?

1e.What is the project’s IRR? Based on this, should the project be accepted?

1f. What is the project’s modified IRR? Based on this, should the project be accepted?

please answer by hand/ equation if possible. Thank you so much for your time and attention.

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Trinidad Tremblay
Trinidad TremblayLv2
28 Sep 2019
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Can i see the work or preferrably the keystrokes on a BA II financial calculator?

Provelli Corp. is analyzing a project with an initial cost of $102,000 and cash inflows of $65,000 in year one and $74,000 in year two. This project is an extension of the firm's current operations and thus is as risky as the current firm. The firm uses only debt and common stock to finance its operations and maintains a debt-to-equity ratio of 0.45. The after-tax cost of debt is 4.8 percent, the cost of equity is 12.7 percent, and the tax rate is 35 percent.

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A project has an initial investment of $500,000. If the expected cash inflows from the project are $200,000 in year 1, $190,000 in year 2, $170,000 in year 3, and $150,000 in year 4, what is the project’s payback? If the firm’s hurdle payback rate were 2.5 years, would you accept the project?

1a. Refer to problem #1. If the firm’s cost of capital is 14.5%, what is the project’s net present value? Based on this, would you accept the project?

1b. Refer to problem #1. What is the project’s profitability index (cost of capital = 14.5%)? Based on this, would you accept the project?

1c.Refer to Problem #1. What is the project’s internal rate of return? If the cost of capital is 14.5% would you accept the project?

1d.Refer to Problem #1. What is the project’s modified internal rate of return if the cost of capital is 14.5%. Would you accept this problem?

please answer by hand/ equation. Thank you very much for your time and attention.

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