BUS 413 Lecture Notes - Lecture 2: Forklift, Cash Flow, Net Present Value

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 413
• Professor: jerome

Document Summary

I = 12, and then solve for npv = ,861. Financial calculator: input the appropriate cash flows into the cash flow register and then solve for irr = 18%. Npvg = -,500 + ,000 [(1/i) (1/(i*(1 + i)n)] Financial calculator: input the appropriate cash flows into the cash flow register, input. I = 12, and then solve for npv = ,057. Financial calculator: input the appropriate cash flows into the cash flow register and then solve for irr = 17. 97% 18%. The firm should purchase the electric-powered forklift because it has a higher npv than the gas-powered forklift. The company gets a high rate of return (18% > r = 12%) on a larger investment. Fv: if the company takes plan a rather than b, its cash flows will be (in millions of dollars): So, project has a cost of ,000,000 and inflows of ,600,000 per year for 20 years. Since irr > r, we should accept .