Management of a firm with a cost of capital of 12 percent is considering a $100,000 investment with annual cash flow of $44,524 for three years a What are the investments net present value and internal rate of return b The internal rate of return assumes that each cash flow is reinvested at the int...

a NPV 44524PVAIF at 12 for 3 years 100000 445242402 100000 106947 100000 6947 PV P ...

Management of a firm with a cost of capital of 12 percent is considering a $100,000 investment

Question:

Management of a firm with a of 12 percent is considering a $100,000 investment with annual cash flow of $44,524 for three years.
a. What are the investment’s and The assumes that each cash flow is reinvested at the If that reinvestment rate is achieved, what is the total value of the cash flows at the end of the third year?
c. The technique assumes that each cash flow is rein-vested at the firm’s What would be the total value of the cash flows at the end of the third year, if the funds are reinvested at the firm’s Why does management know that the reinvestment assumption for the method can be achieved but that achieving the rein-vestment assumption for the is uncertain?
Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Internal Rate of Return
Internal Rate of Return of IRR is a capital budgeting tool that is used to assess the viability of an investment opportunity. IRR is the true rate of return that a project is capable of generating. It is a metric that tells you about the investment... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...