Assignment: Tuttle Enterprises Help Online by Expert Writers

Assignment: Tuttle Enterprises Help Online by Expert Writers

1. Tuttle Enterprises is considering a project that has the following cash flow and WACC data. What is the project’s NPV? Note that if a project’s projected NPV is negative, it should be rejected.

WACC: 11.00%
Year 0 1 2 3 4
Cash flows −$1,000 $350 $350 $350 $350
$77.49
$81.56
$85.86
$90.15
$94.66

5 points   

QUESTION 2

1. Harry’s Inc. is considering a project that has the following cash flow and WACC data. What is the project’s NPV? Note that if a project’s projected NPV is negative, it should be rejected.

WACC: 10.25%
Year 0 1 2 3 4 5
Cash flows −$1,000 $300 $300 $300 $300 $300
$105.89
$111.47
$117.33
$123.51
$130.01

5 points   

QUESTION 3

1. Warr Company is considering a project that has the following cash flow data. What is the project’s IRR? Note that a project’s projected IRR can be less than the WACC or negative, in both cases it will be rejected.

Year 0 1 2 3 4
Cash flows −$1,050 $400 $400 $400 $400
14.05%
15.61%
17.34%
19.27%
21.20%

5 points   

QUESTION 4

1. Mansi Inc. is considering a project that has the following cash flow data. What is the project’s payback?

Year 0 1 2 3
Cash flows −$750 $300 $325 $350
1.91 years
2.12 years
2.36 years
2.59 years
2.85 years

5 points   

QUESTION 5

1. Warnock Inc. is considering a project that has the following cash flow and WACC data. What is the project’s NPV? Note that a project’s projected NPV can be negative, in which case it will be rejected.

WACC: 10.00%
Year 0 1 2 3
Cash flows −$950 $500 $400 $300
$54.62
$57.49
$60.52
$63.54
$66.72

5 points   

QUESTION 6

1. Barry Company is considering a project that has the following cash flow and WACC data. What is the project’s NPV? Note that a project’s projected NPV can be negative, in which case it will be rejected.

WACC: 12.00%
Year 0 1 2 3 4 5
Cash flows −$1,100 $400 $390 $380 $370 $360
$250.15
$277.94
$305.73
$336.31
$369.94

5 points   

QUESTION 7

1. 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: 10.00%
Year 0 1 2 3
Cash flows −$1,000 $450 $450 $450
  9.32%
10.35%
11.50%
12.78%
14.20%

5 points   

QUESTION 8

1. 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 −$850 $300 $320 $340 $360
14.08%
15.65%
17.21%
18.94%
20.83%

5 points   

QUESTION 9

1. 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 −$900 $500 $500 $500
1.88 years
2.09 years
2.29 years
2.52 years
2.78 years

5 points   

QUESTION 10

1. 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: 6.00%
Year 0 1 2 3 4
CFS −$1,025 $380 $380 $380 $380
CFL −$2,150 $765 $765 $765 $765
$188.68
$198.61
$209.07
$219.52
$230.49

5 points   

QUESTION 11

1. TexMex Food Company is considering a new salsa whose data are shown below. The equipment to be used would be depreciated by the straight-line method over its 3-year life and would have a zero salvage value, and no change in net operating working capital would be required. Revenues and other operating costs are expected to be constant over the project’s 3-year life. However, this project would compete with other TexMex products and would reduce their pre-tax annual cash flows. What is the project’s NPV? (Hint: Cash flows are constant in Years 1-3.)

WACC 10.0%
Pre-tax cash flow reduction for other products (cannibalization) −$5,000
Investment cost (depreciable basis) $80,000
Straight-line depreciation rate 33.333%
Annual sales revenues $67,500
Annual operating costs (excl. depreciation) −$25,000
Tax rate

Is this the question you were looking for? If so, place your order here to get started!

Related posts

Open chat