Type
Solution Manual
Book Title
Fundamentals of Corporate Finance Standard Edition 9th Edition
ISBN 13
978-0073382395

978-0073382395 Chapter 9 Calculator Solutions

April 3, 2019
CHAPTER 9 B-171
While this may look like a MIRR calculation, it is not an MIRR, rather it is a standard IRR calculation.
Since the cash inflows are blocked by the government, they are not available to the company for a
period of one year. Thus, all we are doing is calculating the IRR based on when the cash flows actually
occur for the company.
Calculator Solutions
7.
CFo –$34,000
C01 $16,000
F01 1
C02 $18,000
8.
CFo –$34,000 CFo –$34,000
C01 $16,000 C01 $16,000
F01 1 F01 1
C02 $18,000 C02 $18,000
F02 1 F02 1
9.
CFo –$138,000 CFo –$138,000 CFo –$138,000
C01 $28,500 C01 $28,500 C01 $28,500
F01 9 F01 9 F01 9
B-172 SOLUTIONS
10.
CFo –$19,500
C01 $9,800
F01 1
11.
CFo –$19,500 CFo –$19,500
C01 $9,800 C01 $9,800
F01 1 F01 1
C02 $10,300 C02 $10,300
F02 1 F02 1
C03 $8,600 C03 $8,600
F03 1 F03 1
I = 0% I = 10%
NPV CPT NPV CPT
CFo –$43,000 CFo –$43,000
C01 $23,000 C01 $23,000
F01 1 F01 1
C02 $17,900 C02 $17,900
F02 1 F02 1
C03 $12,400 C03 $12,400
F03 1 F03 1
C04 $9,400 C04 $9,400
F04 1 F04 1
IRR CPT I = 11%
20.44% NPV CPT
$7,507.61
CHAPTER 9 B-173
Project B
CFo –$43,000 CFo –$43,000
C01 $7,000 C01 $7,000
F01 1 F01 1
C02 $13,800 C02 $13,800
F02 1 F02 1
C03 $24,000 C03 $24,000
F03 1 F03 1
C04 $26,000 C04 $26,000
F04 1 F04 1
IRR CPT I = 11%
18.84% NPV CPT
$9,182.29
13. Project X
CFo –$15,000 CFo –$15,000 CFo –$15,000
C01 $8,150 C01 $8,150 C01 $8,150
F01 1 F01 1 F01 1
C02 $5,050 C02 $5,050 C02 $5,050
F02 1 F02 1 F02 1
C03 $6,800 C03 $6,800 C03 $6,800
F03 1 F03 1 F03 1
I = 0% I = 15% I = 25%
NPV CPT NPV CPT NPV CPT
$5,000.00 $376.59 –$1,766.40
B-174 SOLUTIONS
Project Y
CFo –$15,000 CFo –$15,000 CFo –$15,000
C01 $7,700 C01 $7,700 C01 $7,700
F01 1 F01 1 F01 1
C02 $5,150 C02 $5,150 C02 $5,150
F02 1 F02 1 F02 1
C03 $7,250 C03 $7,250 C03 $7,250
F03 1 F03 1 F03 1
14.
CFo –$45,000,000 CFo –$45,000,000
C01 $78,000,000 C01 $78,000,000
F01 1 F01 1
C02 –$14,000,000 C02 –$14,000,000
F02 1 F02 1
I = 10% IRR CPT
CHAPTER 9 B-175
15.
CFo $0 CFo $0 CFo $0
C01 $7,300 C01 $7,300 C01 $7,300
F01 1 F01 1 F01 1
C02 $6,900 C02 $6,900 C02 $6,900
F02 1 F02 1 F02 1
C03 $5,700 C03 $5,700 C03 $5,700
F03 1 F03 1 F03 1
I = 10% I = 15% I = 22%
NPV CPT NPV CPT NPV CPT
16. Project I
CFo $0 CFo –$53,000
C01 $27,000 C01 $27,000
F01 3 F01 3
I = 10% I = 10%
NPV CPT NPV CPT
$67,145.00 $14,145.00
PI = $67,145.00 / $53,000 = 1.267
Project II
CFo $0 CFo –$16,000
17.
CF(A) c. d. e.
Cfo –$300,000 CFo –$300,000 CFo $0
C01 $20,000 C01 $20,000 C01 $20,000
F01 1 F01 1 F01 1
C02 $50,000 C02 $50,000 C02 $50,000
F02 2 F02 2 F02 2

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