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Payback period A) Project L costs $60,000, its expected cash inflows are $13,000 per year for 12...

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Finance

Payback period

A) Project L costs $60,000, its expected cash inflows are$13,000 per year for 12 years, and its WACC is 9%. What is theproject's payback? Round your answer to two decimal places.

B) A project has annual cash flows of $6,000 for the next 10years and then $9,500 each year for the following 10 years. The IRRof this 20-year project is 13.03%. If the firm's WACC is 8%, whatis the project's NPV? Round your answer to the nearest cent. Do notround your intermediate calculations.

Answer & Explanation Solved by verified expert
3.8 Ratings (454 Votes)
Answer A When annual cash flows are uniform Payback period Initial investment Annual cash flow 60000 13000 462 years Projects payback 462 years Answer B IRR of the project 1303 We know IRR is discount rate at    See Answer
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Payback periodA) Project L costs $60,000, its expected cash inflows are$13,000 per year for 12 years, and its WACC is 9%. What is theproject's payback? Round your answer to two decimal places.B) A project has annual cash flows of $6,000 for the next 10years and then $9,500 each year for the following 10 years. The IRRof this 20-year project is 13.03%. If the firm's WACC is 8%, whatis the project's NPV? Round your answer to the nearest cent. Do notround your intermediate calculations.

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