Question
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
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started