A machine that costs $1,500,000 has a 3-year life. It will generate after-tax annual cash flows of
$700,000 at the end of each year. It will be salvaged for $200,000 at the end of year 3.
If your
required rate of return for the project is 13%, what is the NPV of this investment?
A) $400,000 B) $291,417 C) $600,000 D) $338,395
82)
Initial Outlay
Cash Flow in
Period 1
Cash Flow in
Period 2
Cash Flow in
Period 3
Cash Flow in
Period 4
$4,000,000 $1,546,170 $1,546,170 $1,546,170 $1,546,170
The Internal Rate of Return (to nearest whole percent) is
A) 20%. B) 10%. C) 18%. D) 24%.
B
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In an economy, the amount of money held in currency and coins is $3,500, the amount of money held as traveler's check is $1,000, the amount of money held as checkable deposits is $2,000, the amount of money held in savings deposit is $4,000, and the amount of money held with retailed money market mutual funds is $700. M1 in the economy equals
A. $3,500. B. $6,500. C. $10,500. D. $11,300.
In the context of speed, the _____ of magnetic hard disks is still significantly better than that of CDs and their faster relatives, DVDs.
A. durability B. transfer rate C. reliability D. portability
The payback period is the
a. length of time over which the investment will provide cash inflows. b. length of time over which the initial investment is recovered. c. shortest length of time over which an investment may be depreciated. d. shortest length of time over which the net present value will be positive.
If we define the "premium" on an option to be the difference between the price at which an option sells and the exercise value (or the difference between the stock's current market price and the strike price), then we would expect the premium to increase as the stock price increases, other things held constant.
Answer the following statement true (T) or false (F)