Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem: Consider the project with the given expected cash flows:

Year 

Cash flow

0

-$ 500000

1

$100,000

2

$110,000

3

$550,000

[A] If the discount rate is 0%, compute the project's net present value?
[B] If the discount rate is 4%, compute the project's net present value?
[C] If the discount rate is 8%, compute the project's net present value?
[D] If the discount rate is 10%, compute the project's net present value?
[E] Compute this project's internal rate of return?

Now make a chart where the discount rate is on the horizontal axis (the "x" axis) & the net present value on the vertical axis [the Y axis]. Create the net present value of the project as a function of the discount rate by dots for the 4 discount rates. Connect the 4 points using a free hand 'smooth' curve. The curve intersects the horizontal line at a particular discount rate. find out the discount rate at which the graph intersects the horizontal axis?

Look at the graph you draw & prepare a short paragraph stating what the graph 'shows'. 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M918218

Have any Question? 


Related Questions in Basic Finance

What is the main difference between nominal and ordinal

What is the main difference between nominal and ordinal categorical data?

A multiple regression model is estimated using 3

A multiple regression model is estimated using 3 explanatory variables. The r^2 was found to be 0.77. the coefficient of determination for the regression of X2 on the other explanatory variables was found to be 0.69. Cal ...

Question carmen tilley a recent college graduate has

Question: Carmen Tilley, a recent college graduate, has decided to accept a job offer from a nonprofit organization. She'll earn $34,000 a year but will receive no employee health benefits. Carmen estimates that her mont ...

In groups of 3-4 students should choose firstly an industry

In groups of 3-4, students should choose firstly an industry and secondly two (2) ASX listed companies in this same industry upon which to undertake a fundamental analysis. Fundamental Analysis seeks to identify factors ...

Why are direct financing transactions more costly or

Why are direct financing transactions more costly or inconvenient than intermidiated transactions?

1 what are the principal accounts that appear on a banks

1. What are the principal accounts that appear on a bank's balance sheet (or Report of Condition)? 2. Which accounts are most important and least important on the asset side of a bank's balance sheet?The rank order of as ...

Communication is our way of sharing ideas and experiences

Communication is our way of sharing ideas and experiences with other individuals, groups, and institutions. Public relations is very much a communication process and effective communication is at the core of strategic pu ...

What do you think about the following statement i am going

What do you think about the following statement? "I am going to receive $100 two years from now and $200 three years from now, so I am getting a $300 future value." How could the two cash flows be compared or combined?

Budgeting with real optionsa capital investment project

Budgeting with Real Options A capital investment project that generates new opportunities is more valuable than one that doesn't. A flexible project, one that does not commit management to a fixed operating strategy is m ...

For this assignment you will analyze a home mortgage loan1

For this assignment, you will analyze a home mortgage loan. 1. Find a description, asking price, and real estate taxes of a house for sale, and decide on a purchase price you would be willing to pay (assuming you have th ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate