An investment of $105 generates after-tax cash flows of $30 in Year 1, $90 in Year 2, and $150 in Year 3. The required rate of return is 20 percent. The net present value is closest to
Net present value = -$105 + $30/1.20 + $90/1.202 + $150/1.203
Net present value = $69.31
An investment of $105 generates after-tax cash flows of $30 in Year 1, $90 in Year...
An investment of $83 generates after-tax cash flows of $40.00 in Year 1, $68.00 in Year 2, and $131.00 in Year 3. The required rate of return is 20 percent. The net present value is
You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 13.2 percent, compounded ankually. End of year 1. $3,644 2. $2,697 3. $445 4. $3,696 What is the present value of this investment if 13.2 percent per year is the appropriate discount rate?
You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 6.6 percent, compounded annually. End of year 1. $2,566 2. $3,895 3. $239 4. $2,378 What is the present value of this investment if 6.6 percent per year is the appropriate discount rate? Round the answer to two decimal places.
You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 8.7 percent, compounded annually. End of year 1. $3,853 2. $1,862 3. $953 4. $2,011 What is the present value of this investment if 8.7 percent per year is the appropriate discount rate? Round the answer to two decimal places.
5.) An investment costing S50,000 promises an after tax cash flow of $18,000 per year for 6 years. a. Find the investment's accounting rate of return and its payback period. b. Find the investment's net present value at a 15 percent discount rate C. Find the investment's internal rate of return. d. Assuming the required rate of return on the investment is 15 percent, which of the above figures of merit indicate the investment is attractive? Which indicate it is...
Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. a. Campbell Manufacturing is considering the purchase of a new welding system. The cash benefits will be $480,000 per year. The system costs $2,250,000 and will last 10 years. b. Evee Cardenas is interested in investing in a women's specialty shop. The cost of the investment is $280,000. She estimates that the return from owning her own shop will be $40,000 per year. She...
Seaborn Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $850 2 1,020 3 1,340 4 1,200 Required: (a) If the discount rate is 11 percent, what is the present value of these cash flows? (b) What is the present value at 16 percent? (c) What is the present value at 27 percent?
Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. a. Campbell Manufacturing is considering the purchase of a new welding system. The cash benefits will be $480,000 per year. The system costs $2,700,000 and will last 10 years. b. Evee Cardenas is interested in investing in a women's specialty shop. The cost of the investment is $270,000. She estimates that the return from owning her own shop will be $52,500 per year. She...
Initial investment............... $80,000 Annual after-tax cash inflow............. ? Salvage value........................ $0 Net present value................ $13,600 Life of the project................ 7 years Discount rate........................ 12% Based on the data given above, the annual cash inflow from the project after the initial investment is closest to... (assume the after-tax cash flows are the same each year) Select one: a. $36,428 b. $22,766 c. $23,747 d. $20,509 e. $32,894
Seaborn Co. has identified an investment project with the following cash flows. Year Cash Flow 1 $800 2 1,080 3 1,290 4 1,120 Required: (a) If the discount rate is 11 percent, what is the present value of these cash flows? A. 3,205.23 B. 4,290.00 C. 3,354.01 D. 3,638.90 E. 3,278.29 (b) What is the present value at 18 percent? A. 4,290.00 B. 3,323.38 C. 2,816.42 D. 2,758.94 E. 3,635.58 (c) What is the present value...