Question
1. An capital investment project provides a company with expected cash flows of $10,000; $12,000; $14,000; $16,000, and $18,000 in years 1-5, respectively. The investment
1. An capital investment project provides a company with expected cash flows of $10,000; $12,000; $14,000; $16,000, and $18,000 in years 1-5, respectively. The investment will require an initial expenditure of $35,000 and the company has a weighted average cost of capital of 9.0%. What is the net present value of the project?
2. A stock earns a monthly return of 0.75%. What is the equivalent annualized rate of return?
3. The total return on an investment over a five year period is 65%. What is the equivalent annualized rate of return?
4. What is the internal rate of return for the project given in question 3, above?
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