If the cost of capital is 9 percent and an investment costs $40,000, should you make...
If the cost of capital is 9 percent and an investment costs $40,000, should you make this investment if the estimated cash flows are $7,000 for years 1 through 3, $13,000 for years 4 through 6, and $19,000 for years 7 through 10? Use Appendix B and Appendix D to answer the questions. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.
NPV: $
The investment should/should not be made.
Appendix B
Appendix D
Homework Answers
Add Answer to:
If the cost of capital is 9 percent and an investment costs
$40,000, should you make...
Management of TSC, Inc. is evaluating a new $75,000 investment with the following estimated cash flows: Year Cash Flo...
Management of TSC, Inc. is evaluating a new $75,000 investment
with the following estimated cash flows:
Year
Cash Flow
1
$
13,000
2
35,000
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
Appendix B to answer the question. Use a minus sign to enter a
negative value, if any. Round your answer to the nearest
dollar.
The NPV of the investment...
A firm’s cost of capital is 9 percent. The firm has three investments to choose among;...
A firm’s cost of capital is 9 percent. The firm has three
investments to choose among; the cash flows of each are as
follows:
Cash Inflows
Year
A
B
C
1
$
457
—
$
1,344
2
457
—
—
3
457
—
—
4
—
$
1,756
—
Each investment requires a $1,200 cash outlay, and investments B
and C are mutually exclusive. Use Appendix A, Appendix B and
Appendix D to answer the questions. Assume that the investments...
Problem 22-17 A firm has the following investment alternatives. Each costs $14,000 and has the following...
Problem 22-17 A firm has the following investment alternatives. Each costs $14,000 and has the following cash inflows. Year Cash Inflow 1 2 3 $5,000 $5,000 $5,000 $5,000 4,000 5,600 5,100 4,300 5,500 4,500 3,900 3,100 Investment A is considered to be typical of the firm's investments. Investment B's cash flows vary over time but are considered to be less certain. Investment C's cash flows diminish over time but because most of the cash flows occur early in the investment's...
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,...
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!
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...
Management of a firm with a cost of capital of 10 percent is considering a $126,000 investment with annual cash flow of...
Management of a firm with a cost of capital of 10 percent is considering a $126,000 investment with annual cash flow of $52,460 for three years. Use Appendix A and Appendix D to answer the questions. What are the investment’s net present value and internal rate of return? Use a minus sign to enter a negative value, if any. Round your answers for the net present value to the nearest dollar and for the internal rate of return to the...
Management of TSC, Inc. is evaluating a new $89,000 investment with the following estimated cash flows:...
Management of TSC, Inc. is evaluating a new $89,000 investment with the following estimated cash flows: Year Cash Flow 1 $ 16,000 2 22,000 3 43,000 4 63,000 The firm’s cost of capital is 14 percent and the project will require that the firm spend $30,000 to terminate the project. Use Appendix B to answer the question. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. The NPV of the investment...
Question 1: Evaluating Investment projects You are planning to invest $50,000 in new equipment. This investment...
Question 1: Evaluating Investment projects You are planning to invest $50,000 in new equipment. This investment will generate net cash flows of $30,000 a year for the next 2 years. The salvage value after 2 years is zero. The cost of capital is 25% a year. a) Compute the net present value NPV = $ Enter negative numbers with a minus sign, l.e., -100 not ($100) or (100). Should you invest? Why? ONO -- the NPV is negative, which indicates...
Question 1: Evaluating investment projects You are planning to invest $100,000 in new equipment. This investment will g...
Question 1: Evaluating investment projects You are planning to invest $100,000 in new equipment. This investment will generate net cash flows of $60,000 a year for the next 2 years. The salvage value after 2 years is zero. The cost of capital is 25% a year. a) Compute the net present value NPV = $ Enter negative numbers with a minus sign, i.e., -100 not ($100) or (100). Should you invest? Why? O NO -- the NPV is negative, which...
Question 1: Evaluating investment projects You are planning to invest $25,000 in new equipment. This investment...
Question 1: Evaluating investment projects You are planning to invest $25,000 in new equipment. This investment will generate net cash flows of $15,000 a year for the next 2 years. The salvage value after 2 years is zero. The cost of capital is 25% a year. a) Compute the net present value NPV = $ Enter negative numbers with a minus sign, i.e., -100 not ($100) or (100). Should you invest? Why? YES -- the NPV is positive, which indicates...
Management of TSC, Inc. is evaluating a new $75,000 investment
with the following estimated cash flows:
Year
Cash Flow
1
$
13,000
2
35,000
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
Appendix B to answer the question. Use a minus sign to enter a
negative value, if any. Round your answer to the nearest
dollar.
The NPV of the investment...
Problem 22-17 A firm has the following investment alternatives. Each costs $14,000 and has the following cash inflows. Year Cash Inflow 1 2 3 $5,000 $5,000 $5,000 $5,000 4,000 5,600 5,100 4,300 5,500 4,500 3,900 3,100 Investment A is considered to be typical of the firm's investments. Investment B's cash flows vary over time but are considered to be less certain. Investment C's cash flows diminish over time but because most of the cash flows occur early in the investment's...
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...
Question 1: Evaluating Investment projects You are planning to invest $50,000 in new equipment. This investment will generate net cash flows of $30,000 a year for the next 2 years. The salvage value after 2 years is zero. The cost of capital is 25% a year. a) Compute the net present value NPV = $ Enter negative numbers with a minus sign, l.e., -100 not ($100) or (100). Should you invest? Why? ONO -- the NPV is negative, which indicates...
Question 1: Evaluating investment projects You are planning to invest $100,000 in new equipment. This investment will generate net cash flows of $60,000 a year for the next 2 years. The salvage value after 2 years is zero. The cost of capital is 25% a year. a) Compute the net present value NPV = $ Enter negative numbers with a minus sign, i.e., -100 not ($100) or (100). Should you invest? Why? O NO -- the NPV is negative, which...
Question 1: Evaluating investment projects You are planning to invest $25,000 in new equipment. This investment will generate net cash flows of $15,000 a year for the next 2 years. The salvage value after 2 years is zero. The cost of capital is 25% a year. a) Compute the net present value NPV = $ Enter negative numbers with a minus sign, i.e., -100 not ($100) or (100). Should you invest? Why? YES -- the NPV is positive, which indicates...
Most questions answered within 3 hours.
-
For the following reaction, 0.128 moles of
potassium hydrogen sulfateare mixed with
0.504 moles of potassium...
asked 36 seconds ago -
1. What is the present value of $400, three years in the future
if the interest...
asked 33 minutes ago -
The labor force minus the number of employed equals the number
of unemployed.
a. True
b....
asked 2 hours ago -
Determine the mass in units of grams [g] of 0.49 moles [mol]
of a new fictitious...
asked 3 hours ago -
A horizontal mass of M=5kg is on a spring and stretched to
x=0.5m when released from...
asked 4 hours ago -
26 of 50
"I have worked at the Arizona Humane Society for ten years, and
have...
asked 4 hours ago -
Compare and contrast zero based budgeting and incremental (or
base year) budgeting.
asked 4 hours ago -
4 pts 10. Which of the following hypothesis would be MOST
difficult to test experimentally? Group...
asked 4 hours ago -
A business owner makes 1,000 items a day. Each day he or she
contributes eight hours...
asked 4 hours ago -
A
circular loop in the plane of a paper lies inca0.65 T magnetic
field pointing into...
asked 4 hours ago -
A business owner is trying to decide whether to buy, rent, or
lease office space and...
asked 4 hours ago -
Thermal Storage Solar heating of a house is much more efficient
if there is a way...
asked 5 hours ago