Ramos Company is considering a capital expenditure for which the periodic cash inflows are expected to be normally distributed and perfectly correlated The expected net present value of the proposed project is $5,000, and the standard deviation of the cash inflows is $1,000 in each period The initi...

The difference in the results is due to rounding in the present value tables 1 Year 0 1 ...

Ramos Company is considering a capital expenditure for which the periodic cash inflows are expected to be

Question:

Ramos Company is considering a capital expenditure for which the periodic cash inflows are expected to be normally distributed and perfectly correlated. The expected of the proposed project is $5,000, and the standard deviation of the cash inflows is $1,000 in each period. The initial cash outflow has a zero standard deviation. The company's weighted-average is 10%, and capital project is expected to have a life of 5 years.
Required:
Compute the standard deviation of the expected for the Ramos Company investment. 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... 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...