1. Chronic Pain Clinic has estimated the following cash flows associated with a new project. The project cost of capital (discount rate) is 8 percent.
Year 0: ($700,000)
Year 1: $400,000
Year 2: $400,000
Year 3: $400,000
2. What is the project’s net present value?
A. $186,897
B. $197,619
C. $208,225
D. $324,538
E. $330,839
Chronic Pain Clinic has estimated the following cash flows associated with a new project. The project cost of capital (discount rate) is 9 percent.
Year 0: ($850,000)
Year 1: $400,000
Year 2: $400,000
Year 3: $400,000
What is the project’s internal rate of return?
A. 18.5 percent
B. 19.4 percent
C. 20.6 percent
D. 23.8 percent
E. 24.4 percent
3. Assume a project has the following expected cash flows:
Year 0: ($350,000)
Year 1: $125,000
Year 2: $130,000
Year 3: $170,000
Year 3: $200,000
What is the project’s payback (payback period)?
A. 2.20 years
B. 2.45 years
C. 2.54 years
D. 2.62 years
E. 3.05 years