Finance Data Bank 39160

61.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:

Don't use plagiarized sources. Get Your Custom Essay on
Finance Data Bank 39160
Just from $5/Page
Order Essay

10.00%

 

New WACC:

12.50%

Year

0

1

2

3

Cash flows

-$1,000

$410

$410

$410

62.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:

8.50%

Year

0

1

2

3

Cash flows

-$1,000

$410

$410

$410

63.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:

8.75%

 

 

 

Year

0

1

2

3

Cash flows

-$1,000

$450

$450

$450

 

64.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:

14.75%

 

 

 

Year

0

1

2

3

Cash flows

-$800

$350

$350

$350

65.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

-$1,175

$300

$320

$340

$360

66.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:

13.25%

 

 

 

 

Year

0

1

2

3

4

Cash flows

-$850

$300

$320

$340

$360

67.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

-$750

$300

$310

$320

$330

$340

68.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

-$950

$500

$500

$500

69.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

-$700

$525

$485

$445

$405

70.Tesar Chemicals is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates the NPV. If the decision is made by choosing the project with the higher IRR rather than the one with the higher NPV, how much, if any, value will be forgone, i.e., what’s the chosen NPV versus the maximum possible NPV? Note that (1) “true value” is measured by NPV, and (2) under some conditions the choice of IRR vs. NPV will have no effect on the value gained or lost.

WACC:

6.75%

 

 

 

 

 

0

1

2

3

4

CFS -$1,100

$550

$600

$100

$100

CFL

-$2,700

$650

$725

$800

$1,400

71.A firm is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO wants to use the IRR criterion, while the CFO favors the NPV method. You were hired to advise the firm on the best procedure. If the wrong decision criterion is used, how much potential value would the firm lose?

WACC:

7.75%

 

 

 

 

 

0

1

2

3

4

CFS -$1,025

$380

$380

$380

$380

CFL

-$2,150

$765

$765

$765

$765

72.Sexton Inc. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be forgone? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the one with the higher IRR will also have the higher NPV, so no value will be lost if the IRR method is used.

WACC:

15.25%

 

 

 

 

 

0

1

2

3

4

CFS -$2,050

$750

$760

$770

$780

CFL

-$4,300

$1,500

$1,518

$1,536

$1,554

 

73.Moerdyk& Co. is considering Projects S and L, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. If the decision is made by choosing the project with the higher IRR, how much value will be forgone? Note that under certain conditions choosing projects on the basis of the IRR will not cause any value to be lost because the one with the higher IRR will also have the higher NPV, i.e., no conflict will exist.

WACC:

11.50%

 

 

 

 

 

0

1

2

3

4

CFS -$1,025

$650

$450

$250

$50

CFL

-$1,025

$100

$300

$500

$700

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

We are committed to making our customer experience enjoyable and that we are keen on creating conditions where our customers feel secured and respected in their interactions with us.
With our qualified expert team who are available 24/7, we ensure that all our customer needs and concerns are met..

Money Payback-back guarantee

Our refund policy allows you to get your money back when you are eligible for a refund. In such a case, we guarantee that you will be paid back to your credit card. Another alternative we offer you is saving this money with us as a credit. Instead of processing the money back, keeping it with us would be an easier way to pay for next the orders you place

Read more

Zero-plagiarism guarantee

All orders you place on our website are written from scratch. Our expert team ensures that they exercise professionalism, the laid down guidelines and ethical considerations which only allows crediting or acknowledging any information borrowed from scholarly sources by citing. In cases where plagiarism is confirmed, then the costumier to a full refund or a free paper revision depending on the customer’s request..

Read more

Free-revision policy

Quality is all our company is about and we make sure we hire the most qualified writers with outstanding academic qualifications in every field. To receive free revision the Company requires that the Customer provide the request within fourteen (14) days from the first completion date and within a period of thirty (30) days for dissertations.

Read more

Privacy policy

We understand that students are not allowed to seek help on their projects, papers and assignments from online writing services. We therefore strive to uphold the confidentiality that every student is entitled to. We will not share your personal information elsewhere. You are further guaranteed the full rights of originality and ownership for your paper once its finished.

Read more

Fair-cooperation guarantee

By placing an order with us, you agree to the service we provide. We will endear to do all that it takes to deliver a comprehensive paper as per your requirements. We also count on your cooperation to ensure that we deliver on this mandate.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency