The Horizon Company will invest $60,000 in a temporary project that will generate the following cash inflows for the next three years. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Cash Flow 1 $ 15,000 2 25,000 3 40,000 The firm will also be required to spend $10,000 to close down the project at the end of the three years. a. Compute the net present value if the cost of capital is 10 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
Note : answer not = $ 3,163.04
The Horizon Company will invest $60,000 in a temporary project that will generate the following cash inflows for the next three years. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year Cash Flow 1 $ 15,000 2 25,000 3 40,000 The firm will also be required to spend $10,000 to close down the project at the end of the three years. a. Compute the net present value if the cost of capital is 10 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
Note : answer not = $ 3,163.04
Related questions
| Aerospace Dynamics will invest $135,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Note that the fourth yearâs cash flow is negative.) Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. |
| Year | Cash Flow | |||
| 1 | $ | 46,000 | ||
| 2 | 54,000 | |||
| 3 | 68,000 | |||
| 4 | (53,000 | ) | ||
| 5 | 120,000 | |||
| a. | What is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) |
| Net present value | $ |
| b. | Should the project be undertaken? | ||||
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