1. Project K costs $71,813.09, its expected cash inflows are $14,000 per year fo
ID: 2654106 • Letter: 1
Question
1. Project K costs $71,813.09, its expected cash inflows are $14,000 per year for 11 years, and its WACC is 10%. What is the project's IRR? Round your answer to two decimal places.
2. Project K costs $45,000, its expected cash inflows are $11,000 per year for 8 years, and its WACC is 8%. What is the project's discounted payback? Round your answer to two decimal places.
3. Project K costs $60,000, its expected cash inflows are $14,000 per year for 6 years, and its WACC is 9%. What is the project's payback? Round your answer to two decimal places.
Explanation / Answer
Ans
IRR Project Cost -71,813.09 Expected Cash Inflows PA 14,000.00 No Of Years 11.00 PVAF for 10% for 11 Years (1-(1+r^-n))/r 6.50 PV of Cah inflow 90,930.85 NPV 19,117.76 IRR 15.50% 5.13 PV of Cash inflow @ 15.5% for 11 Years 14000*5.1295 71,813.00 NPV 71813-71813 - Discounted Pay Back Project Cost -45,000.00 Expected Cash Inflows PA 11,000.00 No Of Years 8.00 PVAF for 8% for 8 Years (1-(1+r^-n))/r 5.75 PV of Cah inflow 63,213.03 NPV 18,213.03 PVAF for 8% for 5 Years 3.99 Expected cash inflow at end of year 5 11000*3.99 43,919.81 Shortage of cash inflow 1,080.19 Cash inflow for Year 6 0.6302*11000 6932.2 Discounted Pay Back 5+1080.19/6932.2 5.16 5.16 Yrs Pay Back Project Cost -60,000.00 Expected Cash Inflows PA 14,000.00 Project Payback 4.29Related Questions
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