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A factory costs $450,000. You forecast that it will produce cash inflows of $145,000 in year 1, $205,000 in year 2, and $350,000 in year
A factory costs $450,000. You forecast that it will produce cash inflows of $145,000 in year 1, $205,000 in year 2, and $350,000 in year 3. The discount rate is 10%.
| a. | Calculate the PV of cash inflows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Present value | $ |
| b. | Is the factory a good investment? | ||||
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Contemporary Quantitative Finance
Authors: Carl Chiarella, Alexander Novikov
2010th Edition
3642034780, 978-3642034787
