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Corporate FInace Assignment/ Professional Essay Writers

1. NPV, IRR, Profitability Index

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You are reviewing a new project. The required return for assets of this risk level is 12%. The estimated cash flows are:

◦      Year 0: CF = −165,000

◦      Year 1: CF = 63,120;

◦      Year 2: CF = 70,800;

◦      Year 3: CF = 91,080;

a. What is the NPV, IRR, and the profitability index?

b. Should you accept or reject this project?

writing a position paper

2. Payback, Discounted Payback, and AAR.

You are reviewing a new project. The required return for assets of this risk level is 12%. The estimated cash flows are:

◦      Year 0: CF = -165,000

◦      Year 1: CF = 63,120; Net Income = 13,620

◦      Year 2: CF = 70,800; Net Income = 3,300

◦      Year 3: CF = 91,080; Net Income = 29,100

◦      Average Book Value = 72,000

◦      Assume we will accept the project if it pays back within two years and required AAR = 25%

a. What is the payback period, the discounted payback period?

b. What is the AAR?

c. Should you accept or reject this project?  Get Finance Help Today

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