NET PRESENT VALUE (1) Find the NPV of a project that costs $10,000 and generates OCF's of $2000 in the first year, $3000 in the 2 nd , $1500 in the 3 rd , $5000 in the 4 th , and $3000 in the 5 th year. The cost of capital is 15%. Also find the IRR? (2) Find the IRR of a project that costs $15,000 and generates OCF's of $3000 in the first year, $8000 in the 2 nd , $1500 in the 3 rd , $6000 in the 4 th , and $1000 in the 5 th year. (3) If Sales for the 1 st year are $3000, 2 nd year are $5000 and 3 rd year are $7000. The depreciation is $2000 each year and CoG's are 25% of Sales. If the tax rate is 20%, the cost of capital is 12% and the cost of the project is $6000 find the NPV and the IRR? (4) Find the payback period of a project that costs $2000 and generates $500 in the 1 st year, $700 in the 2 nd year, $800 in the 3 rd year, $600 in the 4 th year. Also find the IRR of the project? (5) Find the payback period of a project that costs $5000 and generates $800 in the 1 st year, $900 in the 2 nd year, $2800 in the 3 rd year, $2600 in the 4 th year. Also find the NPV of the project if the cost of capital is 12%? (6) If Sales for the 1 st year are $10000, 2 nd year are $15000 and 3 rd year are $7000. The depreciation is $5000 each year. Fixed costs are $2000 every year and Variable costs are 10% of sales. If the tax rate is 25%, the cost of capital is 10% and the cost of the project is $15000 find the NPV and the IRR? (7) A bond is selling at a premium of $300, pays a coupon of 10%, and the TTM is 5 years. What is the market yield? 8. f the price of a stock (P 0 ) is $40; the dividend paid (D 0 ) = $4; the cost of equity (R E ) = 15%, find g. 4.545% 9. AOL's dividends grow at a rate of 25% for the first 4 years, and then at a rate of 5% thereafter. If D 0 = $15; and R E = 12%; find the price of the stock. 10. A firm evaluates all of its projects by using the NPV decision rule. What is the NPV at a required return of 11% and 23%? Year Cash Flow 0 -$ 29,000 1 21,000 2 14,000 3 10,000