NPV = -300000 + 100000 * (P/A, 10%,10) - 50000 * (P/F, 10%,1)
= -300000 + 100000 * 6.144567 - 50000 * 0.909091
= 269002.16
9. If you invest $300,000 and you expect after tax cash flows 50,000 one year from now and $100,000 starting two years...
7. You start up a new business and your minimum expected return on capital is 10%. You expect after tax cash flows of $50,000 one year from now and $100,000 starting two years from now and projected to continue for each year thereafter lasting out to year 10. How much can you afford to pay to invest in the business?
1) You invest $50,000 now and receive $10,000 per year for 15 years starting at the end of the first year. What is the payback period in whole number years for this investment? In other words, in what year do you break even on this investment? Use i = 9% annual rate compounded annually, and use the discounted payback approach (not Simple Payback).
You have an opportunity to invest $100,000 now in return for $79,900 in one year and $30,400 in two years. If your cost of capital is 9.2 %, what is the NPV of this investment? The NPV will be $____. (Round to the nearest cent.)
A project has outflows of $100,000 today, $100,000 in one year, and $50,000 in two years. It is then projected to generate annual inflows of $50,000 for 10 years starting three years from today (end of year 3). Cost of capital is 13%. What is this project's PI? Round to two decimal places.
You have an opportunity to invest $100,000 now in return for $80,000 in one year and $30,000 in two years. If your cost of capital is 9.0%, what is the NPV of this investment?
You have an opportunity to invest $100,000 now in return for $80,200 in one year and $29,000 in two years. If your cost of capital is 8.7%, what is the NPV of this investment?
a. You are saving for retirement 10 years from now. How much should you invest today so you will have an annuity of $20,000 per year for 20 years starting from the 11" year? b. If you were to invest $10,000 today @6%, how much would you have at the end of 15 years? C. You are planning to save $100,000 for a yacht purchase 5 years from now. If you believe you can earn an 8% rate of return,...
1.What constant payment for the next 10 years (starting 1 year from now, 10 payments) would be equivalent to receiving $350 every other year starting 10 years from now. Assume the annual cost of capital is 13%. 2.Suppose you own two assets with the following payouts. (1) $250 at the end of every year starting 1 year from now. The annual cost of capital for these cash flows is 9%. (2) $650 one year from now and a cash flow...
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...
Year 1 2 3 4 5 6 High Demand (50%) After-tax cash flows 500,000 700,000 1,000,000 1,300,000 1,400,000 1,000,000 Low Demand (50%) After-tax cash flows 100,000 100,000 100,000 100,000 100,000 100,000 Weighted average after-tax cash flow 300,000 400,000 550,000 700,000 750,000 550,000 . The equipment to make full-size greenhouse kits – 16 feet and 22 feet in diameter – would cost about $2.5 million. If the company closes down early the after-tax cash-flow from the sale of the equipment will...