1.) Calculate the Net Present Value (NPV) of the following project cash flows. The applicable discount rate is 11%.
Year 0: ($25,000)
Years 1-4: $9,000
A.) $2,922.01
B.) $11,000.00
C.) $11,000.00
D.) $36,000.00
2.) Calculate the Net Present Value (NPV) of the following project cash flows. The applicable discount rate is 11%.
Year 0: ($80,000)
Years 1-4: $30,000
A.) $120,000.00
B.) $40,000.00
C.) $13,073.37
D.) $93,073.37
3.) The following data has been compiled for a potential capital project:
$425,000 - Cost of New Equipment
50,000 - Resale of old equipment
75,000 - Salvage value of new equipment
150,000 - Annual Revenues for each of 10 years
35,000 - Additional annual costs for each of 10 years
10 years - Life of equipment
DDB - Double Declining Balance depreciation method
35.0% - Income tax rate
9.4% - Required Rate of Return
What is the Net Present Value (NPV) of the investment and the IRR?
A.) $520,000.00 and 11.9%
B.) $17,285.87 and 9.4%
C.) $47,827.21 and 11.9%
D.) $422,827.21 and 9.4%