Investment Project Value – Details and Rubric
This assignment is assessing learning outcome: GB550-3: Assess the value of proposed investment projects.
- Complete problem: Cost of Equity-CAPM
XYZ, Inc. has a beta of 0.8. The yield on a 3-month T-bill is 4%, and the yield on a 10-year T-bond is 6%. The market risk premium is 5.5%, and the return on an average stock in the market last year was 15%. What is the estimated cost of common equity using the CAPM? Show your work.
- Complete problems: NPV, IRR, MIRR, Profitability Index, Payback, Discounted Payback
A project has an initial cost of $60,000, expected net cash inflows of $10,000 per year for 8 years, and a cost of capital of 12%. Show your work. - What is the project’s NPV? (Hint: Begin by constructing a timeline).
- What is the project’s IRR?
- What is the project’s MIRR?
- What is the project’s PI?
- What is the project’s payback period?
- What is the project’s discounted payback period?
- Your division is considering two investment projects, each of which requires an up-front expenditure of 20 million. You estimate that the investment will produce the following net cash flows:
Year Project A
- 1 $5,000,000
- 2 10,000,000
- 3 20,000,000
Project B
$20,000,000 10,000,000 6,000,000
- What are the two project’s net present values, assuming the cost of capital is 5%? 10%? 15%?
- What are the two projects’ IRRs at these same costs of capital?
Show your work.
Prepare this Assignment as a Word® document. List each question, followed by your answer.
Once completed, submit your Assignment to the Unit 4 Assignment Dropbox. The Assignment is due Tuesday 11:59 p.m. ET of their assigned unit.
What Students Are Saying About Us
.......... Customer ID: 12*** | Rating: ⭐⭐⭐⭐⭐"Honestly, I was afraid to send my paper to you, but you proved you are a trustworthy service. My essay was done in less than a day, and I received a brilliant piece. I didn’t even believe it was my essay at first 🙂 Great job, thank you!"
.......... Customer ID: 11***| Rating: ⭐⭐⭐⭐⭐
"This company is the best there is. They saved me so many times, I cannot even keep count. Now I recommend it to all my friends, and none of them have complained about it. The writers here are excellent."
"Order a custom Paper on Similar Assignment at essayfount.com! No Plagiarism! Enjoy 20% Discount!"
