I only have enough credit for one more question. I am aware that the rule states

Question

I only have enough credit for one more question. I am aware that the rule states you only need to solve a limit of 5 answers. However, in this case there are people who are willing to help answer all of them. If you are one of them, please kindly help me answer all of these questions. Please don't just answer the first question or the five questions, otherwise I'll hit the dislike button. Thank you

Problem 12-1 NpV A project has a to the narest cent. n initial costof $63,425, expected net cash inflows of $14,000 per year for 11 years, and cost of capital of 12%. what is the pre ects NPV? Hint Begin by constructing a time line. Do not round your intermediate calculations. Round your answer

Explanation / Answer

12.1)

present value of annuity = payment per period * [ 1 - (1+i)^-n ]/i

NPV = -initial investment + PV of cash flows

= -63425 + 14000 * [1-(1+12%)^-11]/12%

= 19702.79

12.2)

IRR is the rate at which NPV is zero

0 = -50000 + 12000 * [1-(1+IRR)^-8]/IRR

=>

IRR = 17.31%

12.3)

PV of cash flows = 9000 * [1-(1+12%)^-8]/12% = 44708.76

MIRR = (PV of cash flows/PV of negative cash flows)^(1/n) -1

= (44708.76/71375)^(1/8) - 1

= -5.68%

12.4)

PV of cash flows = 14000 * {1-(1+9%)^-9]/9%

= 83933.46

profitability index = PV of cash flows/initial investment

= 83933.46/60050

= 1.40

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