Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a company is considering investing in a project. The project will require a 10% rate return. The project will require $65,000 investment and provides the

a company is considering investing in a project. The project will require a 10% rate return. The project will require $65,000 investment and provides the following returns:

year 1: $20,000

year 2: $20,000

year 3: $20,000 year

4: $25,000

I)Given that the company needs to make at least 10% return on its project what is the projects NPV for the return on its investment?

A) $85,000

B) $20,000

C) Less than $2,000 but more than $1,000

D) less then $1,000

II)Whats the NPV contribution to the overall project of the 4th year ($25,000) return?

A) $19,072.38

B) $15,026.30

C) $25,000

D) $17,075.34

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles Volume 1 And Volume 2

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

9th Canadian Edition

1119786649, 978-1119786641

More Books

Students also viewed these Accounting questions