1. What is meant by a company's "internal rate of return" and why is it important to use as a metric? What do some of the websites ( i.e. Zenwealth, Investopedia and Wikipedia) say about IRR?

2. What are the strengths and weaknesses of the payback method of ranking project proposals as compared to other methods? What method of comparing investment proposals do you favor and why?

3. The Treasurer of a global Fortune 1000 company is considering investing $50 million in 10 year U.S. Treasury Notes that yield 3.5%. The company's WACC is 6.0%.

Is this a good decision to make an investment that is less than the company's WACC (essentially a negative NPV project)? Explain.

What should the ROI or target yield be on investments for a company with a 6.0% WACC? Explain.

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1. What is meant by a company's "internal rate of return" and why is it important to use as a metric? What do some of the websites (i.e. Zenwealth, Investopedia and Wikipedia) say about IRR?

A company's IRR is the minimum return that a company would like to earn on its investment on a project as it is the opportunity cost or minimum return that the company can earn on alternative investments. Hence, this is the minimum acceptable return to accept a project.

Some of the websites like Wikipedia says that IRR is very effective tool to evaluate capital budgeting projects because it utilizes the time value of money concept and ...

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What is meant by a company's "internal rate of return" and why is it important to use as a metric? What do some of the websites ( i.e. Zenwealth, Investopedia and Wikipedia) say about IRR?

PPG manufactures an epoxy amine that is used to protect the contents of polyethylene terephthalate(PET)containers from reacting with oxigen. The cash flow (in millions)associated with the process is show below. Determine the rate of return.
YEAR COST,$ REVENUE,$
0 -10

I am having problems trying to figure this out. My company is considering whether to invest in a project with an initial cost $538,000 that will provide annual net cash inflows of $82,500 for 10 years. I need to use the interpolation to estimate the internal rate of return.

The 21st century corporation uses the modified internal rate of return. The firm has a cost of capital of 8 percent. The project being analyzed is as follows ($20,000 investment):
Year Cash Flow
1 $10,000
2 $9,000
3 $6,800
a. What is the modified internal rate of return?
b. Assume the tradition

Which of the following is the approximate internal rate of return for an investment that costs $45,880 and provides a $4,000 annuity for 20 years?
a. 11%
b. 6%
c. 8%
d. 10%

When the net present value is positive:
a) the internal rate of return equals the cost of capital
b) the internal rate of return exceeds the cost of capital
c) the internal rate of return is less than the cost of capital
d) the internal rate of return equals zero

Summer Company is considering three capital expenditure projects. Relevant data for the projects are as follows.
See Attachment for Spreadsheet
Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Summer Company uses the straight-line method

Carl Foster, a trainee at an investment banking firm, is trying to get an idea of what real rate of return investors are expecting in today's marketplace. He has looked up the rate paid on 3-month U.S. Treasury bills and found it to be 5.5%. He has decided to use the rate of change in the Consumer Price Index as a proxy for the

I don't understand this problem at all.
Practice 18-16 Ranking by the Internal Rate of Return Method
The company is considering eight capital investment projects. The company has a minimum required internal rate of return of 13%. Screen and rank the eight capital investment projects using the internal rate of return.
P

You're analyzing a project and have completed this info:
Year...............Cash Flow
0....................$-158,000
1....................$34,500
2....................78,500
3....................92,000
Required payback period 2.5 years
Required return 12%
Should the proposed project be accepted based on its i

An investment that costs $100,000 will reduce operating costs by $20,000 per year for 10 years.Determine the internal rate of return of the investment (ignore taxes).Should the investment be undertaken if the required rate of return
is 18 percent?