Present value of the stream = CF1/(1+r)^1 + …………CFn/(1+r)^n
= 48000/(1+6%)^1+67200/(1+6%) ^2+62400/(1+6%)^3+33600/(1+6%)^4+19200/(1+6%)^5
=$198,444.73
Yes
(The Present Value of savings is more than the initial outlay of $188522 thus creating positive NPV)
Your firm has the option of making an investment in new software that will cost $188,522...
Your firm has the option of making an investment in new software that will cost $188,522 today, but will save the company money over several years. You estimate that the software will provide the savings shown in the following table over its 5-year life, E . Should the firm make this investment if it requires a minimum annual return of 6% on all investments? The present value of the stream of savings estimates is $. (Round to the nearest dollar.)...
Your firm has the option of making an investment in new software
that will cost $304,007 today, but will save the company money over
several years, You estimate that the software will provide the
savings shown in the following table (pictured) over its 5-year
life. Should the firm make this investment if it requires a minimum
annual return of 9% on all investments?
Year 01 AWN Savings estimate $83,000 $116,200 $107.900 $58,100 $33,200 The present value of the stream of...
Your firm has the option of making an investment in new software that will cost $1278,367 today and is estimated to provide the savings shown in the following table over its 5-year life.Should the firm make this investment if it requires a minimum annual return of 9% on all investments? Year Savings Estimate 1 $35,000 2 50,000 3 45,000 4 25,000 5 15,000
his Question: 50 pts 1 of 3 (0 complete) This Quiz: 100 pts poss Your firm has the option of making an investment in new software that will cost $231,725 today, but will save the company money over several years. You estimate that the software will provide the savings shown in the following table over its 5-year life. Should the firm make this investment if it requires a minimum annual return of 6% on all investments? The present value of...
ONOFF Chap 5 Problems Due Friday by 11:59pm Points 15 Submitting a text entry box or a file upload Use the examples provided here to work on the following problems (make sure you show all your work) Problem 1: Gabrielle just won $2.75 million in the state lottery. She is given the option of receiving a total of $1,400,000 now, or she can elect to be paid $110.000 at the end of each of the next 25 years. If Gabrielle...
Zebra micro-devices, Inc. is considering an investment in new equipment that will cost $200,000 and is estimated to provide the following annual savings over its 5-year life: What is the internal rate of return associated with the new equipment? Should the company acquire the new equipment if it can earn a return of 12% on its investments? Should the company acquire the new equipment if it can earn a return of 10% on its investments? Year Savings estimate 1 $80,000...
Zahr werdetes es considering en lavestment is new equipment that will cost $120,000 and is estimated to provide the following small 35 a Should the company acquire the new equipment if it can earn a return of 12% on its investments? b) should the company acquire the new equipment if it can earn a return of 9% on its investments? ) Use the principal of value additivity to calculate the present value of the savings 28 ) What is the...
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...
Elliott Dumack must earn a minimum rate of return of 10% to be adequately compensated for the risk of the following investment a. Use present-value techniques to estimate the yield on this investment. b. On the basis of your finding in part a, should Elliott make the proposed investment? a. The yield on this investment is %. (Round to two decimal places.) i Data Table - X Initial Investment $29,548 End of Year Income $15,089 $4,797 $8,639 $3,078 $2,700 (Click...
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...