Estimated Cash Flows Year 0 Discount Rate 2 Net Present Value 0 Wn 3 4 5 Internal Rate Of Return Num A Company Is Pla 1 (30.05 KiB) Viewed 28 times
Estimated Cash Flows Year 0 Discount Rate 2 Net Present Value 0 Wn 3 4 5 Internal Rate Of Return Num A Company Is Pla 2 (36.38 KiB) Viewed 28 times
Estimated Cash Flows Year 0 Discount Rate 2 Net Present Value $0 wN 3 4 5 Internal Rate of Return #NUM! A company is planning to make an investment in the expansion of a manufacturing plant. The amount of the investment is $12 million and the investment is expected to result in incremental cash flow of $2 milion in the year after the expansion is completed. Cash flows over the following 4 years are forecast to grow by $1 million per year. The company's required rate of return for the project is 10% 1. What is the NPV and IRR of this investment? 2. Should the board of directors approve the imnvestment? 3. If the plant expansion turns out to cost $14 million instead of $12 million, does the investment still have positive NPV? Your answers here:
2022 2023 2024 2025 2026 2022 New Store Project initial Outly IncrementalCath How 50 $0 50 $0 A company's Boo is considering an investment of $100,000 to open a new store outlet. The incremental cash flow from the new store is estimated at $200,000 in the first year after it opent. Over the following 4 years the cash flow from the new store is estimated to grow at 9% per year WACC 10 ON Risk Free Rate 2.4 NPV RR IMRE 50 NUMI NDIV/01 1. What is the estimated IRR on this investment? Should the 100 approve the Investment? 2. If the cash flow in the first year is only $170,000 but it grows 12per year over the following four years, what is the IRR? Should the BOD approve the investment? Your answers here:
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