Gas:
Year 1: 5000; Year 2: 5000; Year 3: 5000; Year 4: 5000; Year 5: 5000; Year 6: 5000
NPV= -17,500
4464.29
3985.97
3558.90
3177.59
2837.13
2533.16
NPVg= $3057
IRRg= 18%
Electric:
Year
IRR: It is that rate of interest that makes the sum of all cash flows…
The internal rate of return (IRR) is defined as the discount rate that results in a net present value of zero. IRR uses the time value of money method to calculate the present value of the projects cash inflows and outflows. Cost of capital, or minimum required rate of return, is compared to the IRR to evaluate a project. The IRR needs to be equal to or greater than cost of capital for the project to be acceptable. If the IRR is less than the cost of capital, the project should be rejected. When using IRR the cost of capital is referred to as the “hurdle rate”.…
2. Under Internal Rate of Return the investment is evaluated based on the expected rate of return. The IRR for a cash flow is an interest rate that results in a NPV equal to zero.…
You will hand in your work on a separate piece of paper. Please put your information…
Excel Function method to calculate IRR This function REQUIRES that you have only one cash flow…
1. Using budget data, how many motors would have to be sold for Waltham Motors Division to break even?…
Assume that the before-tax required rate of return for Deer Valley is 14%. Compute the before-tax NPV of the new lift and advise the managers of Deer Valley about whether adding the lift will be a profitable investment. Show calculations to support your answer.…
A project has initial costs of $3,000 and subsequent cash inflows in years 1 – 4 of $1350, 275, 875, and 1525. The company 's cost of capital is 10%. Calculate IRR for this project.…
A project has initial costs of $3,000 and subsequent cash inflows in years 1 ? 4 of $1350, 275, 875, and 1525. The company's cost of capital is 10%. Calculate IRR for this project.…
of Return (IRR) from this project is around 15.66%. Given the projected cash flow information…
1. Assume that the before-tax required rate of return for Deer Valley is 14%. Compute the before-tax NPV of the new lift and advise the managers of Deer Valley about whether adding the lift will be a profitable investment. Show calculations to support your answer.…
Calculate the Internal Rate of Return (IRR) of Project B (Answer expressed to two decimal places)…
With an IRR of 15%, the present value of all the annual cash flow is $770,347.27.…
Compute the current ratio (current assets ÷ current liabilities) as of January 1, 2014, and December 31, 2014, and compute free cash flow for the year 2014.…
As a consulting you always need to come and prepare before you meet the potential client. The proposal must be present at the meeting. As I am reading this case study, I thought it was just a formal personal review of a meeting that two business partners that reach out for help. I do not believe that the consultant was prepared for the meeting. He just talks to the client and go to a firm that he knew nothing about. He did not have an agenda of what the business was all about and he was not focused about the agenda. He manager himself doesn’t even know what is the problem that running in the company before having the consulting to come in.…