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