Finance calculations Questions & Answers 100% Correct!

What is the present value of the following stream of cash flows received at the end of each year, at a discount rate of 7.5% per year? Year 1: $50,000 Year 2: $45,000 Year 3: $43,000 - ANSWERS$120,065 What is the present value of the following stream of cash flows received at the end of each year, at a discount rate of 7.5% per year? Year 1: $43,000 Year 2: $45,000 Year 3: $50,000 - ANSWERS$119,188 A company is evaluating an investment project that requires an initial capital investment of $1,200,000. The project is expected to generate the following cash flows: Year 1 $250,000 Year 2 $500,000 Year 3 $750,000 Year 4 1,000,000 What is the NPV of this project given that the discount rate is 5% per year? - ANSWERS$962,191 Calculate the NPV of a project that costs $350,000 using a discount rate of 5%. The project is expected to generate the following cash flows: Year 1: $80,000 Year 2: $205,000 Year 3: $300,000 Year 4: $500,000 - ANSWERS$582,634 XYZ company is considering purchasing a new piece of equipment. The initial outlay for the equipment is $175,000. It will generate net incremental cash flows of $50,000 in Year 1, $65,000 in Year 2, and $90,000 in Year 3. What is the IRR of the project? - ANSWERS7.56% XYZ company is considering purchasing a new piece of equipment. The initial outlay for the equipment is $300,000. It will generate net incremental cash flows of $100,000 in Year 1, $130,000 in Year 2, and $160,000 in Year 3. What is the IRR of the project? - ANSWERS13.22% A company plans to invest in a new project that is expected to cost $200,000. The new project will generate cash flows of $20,000 every year for the next 15 years. Calculate the payback period given a discount rate of 6.5%. - ANSWERS10.0 A company plans to invest in a new project that is expected to cost $360,000. The new project will generate cash flows of $60,000 every year for the next seven years. Calculate the payback period given a discount rate of 5%. - ANSWERS6.0 Estimate the beta for the stock given the following information (closest answer): Year 1: Stock return = -10%; Market return = -10% Year 2: Stock return = 8%; Market return = 8% - ANSWERS1.0 Estimate the beta for the stock given the following information (closest answer): Year 1: Stock return = 2%; Market return = 8% Year 2: Stock return = -1%; Market return = -4% - ANSWERS0.25 Using the CAPM, calculate the expected return for Company XYZ: Beta = 1 Treasury Bill rate = 3% S&P 500 averaged return rate = 10% - ANSWERS10% Using the CAPM, calculate the expected return for Company XYZ: