An investment with total costs of $14,000 will generate total revenues of $16,000 for one year....
An investment with total costs of $14,000 will generate total revenues of $16,000 for one year. Use Appendix B to answer the questions. Use a minus sign to enter negative values, if any. Round your answers to the nearest dollar.
If funds cost 18 percent, the NPV is $ .
What would be your advice to management?
The investment should/should not be made.
Would your answers be different if the cost of capital is 8 percent?
If funds cost 8 percent, the NPV is $ .
The investment should/should not be made.
Appendix B
Homework Answers
NPV = -initial investment + PV of future cash flows
Present value = Future value/(1+i)^n
i = interest rate per period
n= number of periods
=>
NPV = -14000 + 16000 * 0.847
= -448
The investment should not be made since NPV is negative
Add Answer to:
An investment with total costs of $14,000 will generate total
revenues of $16,000 for one year....
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If the cost of capital is 9 percent and an investment costs $40,000, should you make...
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value, if any. Round your answer to the nearest dollar.
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Appendix...
Management of TSC, Inc. is evaluating a new $75,000 investment with the following estimated cash flows: Year Cash Flo...
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Year
Cash Flow
1
$
13,000
2
35,000
3
40,000
4
56,000
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Appendix B to answer the question. Use a minus sign to enter a
negative value, if any. Round your answer to the nearest
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The NPV of the investment...
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will like for correct answer! OA frm has two pessible investments with the following cash inflows. Each Investment costs $540, and the cost of capital is seven percent. Use Appendix 8 and Appendi...
will like for correct answer!
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A firm’s cost of capital is 9 percent. The firm has three investments to choose among;...
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follows:
Cash Inflows
Year
A
B
C
1
$
457
—
$
1,344
2
457
—
—
3
457
—
—
4
—
$
1,756
—
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Use Appendix A for your reference. (Use appropriate
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Required:
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Management of TSC, Inc. is evaluating a new $75,000 investment
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Year
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1
$
13,000
2
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3
40,000
4
56,000
The firm’s cost of capital is 8 percent and the project will
require that the firm spend $18,000 to terminate the project. Use
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negative value, if any. Round your answer to the nearest
dollar.
The NPV of the investment...
will like for correct answer!
OA frm has two pessible investments with the following cash inflows. Each Investment costs $540, and the cost of capital is seven percent. Use Appendix 8 and Appendix D to questions. Assume that the investments are not mutually exclusive and there are no budget restrictions. answer the Cash Inflows Year A 350 160 120 $210 210 210 a. Based on each investment's net present value, which Investment(s) should the firm make? Use a minus sign...
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Use Appendix A for your reference. (Use appropriate
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Required:
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