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28 Sep 2019
Waste Industries is evaluating a $52,800 project with the following cash flows.
Years Cash Flows 1 $ 9,040 2 15,200 3 19,500 4 16,800 5 25,800
The coefficient of variation for the project is .895.
Coefficient of Variation Discount Rate 0 â .25 5 % .26 â .50 10 % .51 â .75 12 % .76 â 1.00 19 % 1.01 â 1.25 20 %
Use for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. Select the appropriate discount rate.
5% 10% 12% 19% 20%
b. Compute the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate
Net Present Value:
calculations and round your answer to 2 decimal places.)
c. Based on the net present value should the project be undertaken?
Yes No
Waste Industries is evaluating a $52,800 project with the following cash flows.
Years | Cash Flows | |||
1 | $ | 9,040 | ||
2 | 15,200 | |||
3 | 19,500 | |||
4 | 16,800 | |||
5 | 25,800 | |||
|
The coefficient of variation for the project is .895.
Coefficient of Variation | Discount Rate | ||||||
0 | â | .25 | 5 | % | |||
.26 | â | .50 | 10 | % | |||
.51 | â | .75 | 12 | % | |||
.76 | â | 1.00 | 19 | % | |||
1.01 | â | 1.25 | 20 | % | |||
|
Use for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. Select the appropriate discount rate.
5% | |
10% | |
12% | |
19% | |
20% |
b. Compute the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate
Net Present Value:
calculations and round your answer to 2 decimal places.)
c. Based on the net present value should the project be undertaken?
Yes | |
No |
Bunny GreenfelderLv2
28 Sep 2019