1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
vladimir2022 [97]
3 years ago
5

Mass company is investing in a giant crane. it is expected to cost $6.0 million in initial investment, and it is expected to gen

erate an end-of-year cash flow of $3.0 million each year for three years. at the end of the fourth year, there will be a $1.0 million disposal cost. calculate the irr for the project if the cost of capital is 12%.
Business
1 answer:
alexdok [17]3 years ago
3 0
17.8% is the irr for the project if the cost of capital is 12%. IRR <span>is the interest rate at which the net present value (NPV) of all the cash flows (both positive and negative) from a project or investment equal tgo zero.</span> IRR<span> calculations rely on the same </span>formula<span> as NPV does. To </span>calculate IRR <span>using the </span>formula<span>, one would set NPV equal to zero and </span>solve<span> for the discount rate (r), which is the </span>IRR.  <span>Multiply the net cash flow for each period by its discount factor to obtain its present value. Sum the present values of each cash flow to </span>calculate<span> the </span>NPV. Find the IRR<span>, the discount rate, that makes the </span>NPV<span> zero.</span>
You might be interested in
"A 45-year old man earns $150,000 per year and is covered by his employer's 401(k) Plan. He quits" his job and moves to a new co
DaniilM [7]

Answer:

Not to leave previous job.

Explanation:

  • First of all, the question is that what he will lose after leaving the job?
  • His earning per year is equal at both sides, still what's the opportunity cost for him?

<em>The answer is simple,</em> he may earn equal but if looked at it in a bigger picture he is losing 401k retirement plan and It is his opportunity cost. He may regret this after leaving the job.

7 0
3 years ago
A month ago, you bought a one-year bond with a value of $100 that pays a fixed interest rate of 5 percent per year. The interest
My name is Ann [436]

Answer:

less desirable to other investors

Explanation:

<u>Given</u>: Current fixed coupon rate 5%

           Market rate of interest 5%

           New Market Rate of Interest 6%

Value of a bond is inversely related to economy interest rate or the yield to maturity (YTM). Value of a bond is expressed by the following equation:

B_{0}\ = \frac{C}{(1\ +\ YTM)^{1} }  \ +\ \frac{C}{(1\ +\ YTM)^{2} } \ +....+\ \frac{C}{(1\ +\ YTM)^{n} }\ +\ \frac{RV}{(1\ +\ YTM)^{n} }

wherein, C = Coupon rate of interest

         YTM = Market Rate of Interest or interest rate in the economy or investor's expectation

                n= Years to maturity

             RV = Redemption value

In the given case, C = YTM i.e par value bond. When ytm rises to 6%, the value of the bond shall fall making such a bond less attractive since it represents lower coupon payments than investor expectations.

Thus, now the bond would be less desirable to other investors.

3 0
3 years ago
Can some one do this for me ASAP please help.
charle [14.2K]
Professional growth and development - Bob
Mentoring - Debby
Certification - Joseph
Scholarship - Libby
Networking - Chad
8 0
3 years ago
A document commonly used in real estate transactions, detailing the fees, commissions, insurance, etc. that must be transacted f
Ksivusya [100]

Answer:

Closing statement.

Explanation:

A document commonly used in real estate transactions, detailing the fees, commissions, insurance, etc. that must be transacted for a successful transfer of ownership to take place is known as a closing statement. The closing statement is a spreadsheet document that comprises of the statement of actual settlement costs and it is usually provided by a real estate agent to a home seller while the bank gives it to the home buyer.

7 0
3 years ago
Lon has just come home from serving in the Marines and contracts with a local car dealership to purchase a car. The car must be
cricket20 [7]

Answer:

The correct answer is:  A novation.

Explanation:

A novation is the replacement of individuals in a contract with the consent of both parties. The new party takes all the obligation of the initial party and releases the last one from all duty. The novation must be signed for the transferor, the transferee, and the contracting party.

4 0
2 years ago
Other questions:
  • The Tree Top Airline​ (TTA) is a small​ feeder-freight line started with very limited capital to serve the independent petroleum
    9·1 answer
  • Mark the boxes that are true. the federal communications commission regulates radio and television to the extent of licensing st
    14·1 answer
  • A survey of 1000 executives ranked _____________ at the top, as the ideal manager's skill.
    11·1 answer
  • I am Stuck Please Help
    9·1 answer
  • Dyed-Denim Corporation is seeking to lower the costs of value creation and achieve a low-cost position. As a result, it plans to
    7·1 answer
  • In certain industries, Japanese employers do not lay off workers. Therefore, they sometimes have excess supplies of goods that t
    9·1 answer
  • Based on these​ findings, what can we predict about total production long dash whether or not that production is included in the
    14·1 answer
  • Who is your best man to help you with girls<br>and why
    13·1 answer
  • How do macroeconomists distinguish between nominal and real values of​ variables?
    9·1 answer
  • Answer the above questions <br><br>don't spam <br>​
    7·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!