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[91].Maxwell Feed & Seed considering a project that has the

Question : [91].Maxwell Feed & Seed considering a project that has the : 1416408

 

[91].Maxwell Feed & Seed is considering a project that has the following cash flow data.  What is the project's IRR?  Note that a project's projected IRR can be less than the WACC (and even negative), in which case it will be rejected.

 

Year             0   1        2        3        4        5

Cash flows-$9,500$2,000$2,025$2,050$2,075$2,100

 

a.2.08%

b.2.31%

c.2.57%

d.2.82%

e.3.10%

 

[92].Last month, Lloyd's Systems analyzed the project whose cash flows are shown below.  However, before the decision to accept or reject the project, the Federal Reserve took actions that changed interest rates and therefore the firm's WACC.  The Fed's action did not affect the forecasted cash flows.  By how much did the change in the WACC affect the project's forecasted NPV?  Note that a project's projected NPV can be negative, in which case it should be rejected.

 

Old WACC:  10.00%New WACC:  11.25%

Year             0   1        2        3

Cash flows-$1,000$410$410$410

 

a.-$18.89

b.-$19.88

c.-$20.93

d.-$22.03

e.-$23.13

 

[93].Lasik Vision Inc. recently analyzed the project whose cash flows are shown below.  However, before Lasik decided to accept or reject the project, the Federal Reserve took actions that changed interest rates and therefore the firm's WACC.  The Fed's action did not affect the forecasted cash flows.  By how much did the change in the WACC affect the project's forecasted NPV? Note that a project's projected NPV can be negative, in which case it should be rejected.

 

Old WACC:  8.00%New WACC:  11.25%

Year             0   1        2        3

Cash flows-$1,000$410$410$410

 

a.-$59.03

b.-$56.08

c.-$53.27

d.-$50.61

e.-$48.08

 

[94].Ehrmann Data Systems is considering a project that has the following cash flow and WACC data.  What is the project's MIRR?  Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.

 

WACC:  10.00%

Year             0   1        2        3

Cash flows-$1,000$450$450$450

 

a. 9.32%

b.10.35%

c.11.50%

d.12.78%

e.14.20%

 

[95].Ingram Electric Products is considering a project that has the following cash flow and WACC data.  What is the project's MIRR?  Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.

 

WACC:  11.00%

Year             0   1        2        3

Cash flows-$800$350$350$350

 

a. 8.86%

b. 9.84%

c.10.94%

d.12.15%

e.13.50%

 

[96].Malholtra Inc. is considering a project that has the following cash flow and WACC data.  What is the project's MIRR?  Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.

 

WACC:10.00%

Year             0   1        2        3        4

Cash flows-$850$300$320$340$360

 

a.14.08%

b.15.65%

c.17.21%

d.18.94%

e.20.83%

 

[97].Hindelang Inc. is considering a project that has the following cash flow and WACC data.  What is the project's MIRR?  Note that a project's projected MIRR can be less than the WACC (and even negative), in which case it will be rejected.

 

WACC:  12.25%

Year             0   1        2        3        4

Cash flows-$850$300$320$340$360

 

a.13.42%

b.14.91%

c.16.56%

d.18.22%

e.20.04%

 

[98].Stern Associates is considering a project that has the following cash flow data.  What is the project's payback?

 

Year             0   1        2        3        4        5

Cash flows-$1,100$300$310$320$330$340

 

a.2.31 years

b.2.56 years

c.2.85 years

d.3.16 years

e.3.52 years

 

[99].Fernando Designs is considering a project that has the following cash flow and WACC data.  What is the project's discounted payback?

 

WACC:  10.00%

Year             0   1        2        3

Cash flows-$900$500$500$500

 

a.1.88 years

b.2.09 years

c.2.29 years

d.2.52 years

e.2.78 years

[100].Masulis Inc. is considering a project that has the following cash flow and WACC data.  What is the project's discounted payback?

 

WACC:  10.00%

Year             0   1        2        3        4

Cash flows-$950$525$485$445$405

 

a.1.61 years

b.1.79 years

c.1.99 years

d.2.22 years

e.2.44 years

 

 

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