Question
A project costs $28000 today and will return $16050 at the end of first year and $17325 at the end of second year. Interest rate
A project costs $28000 today and will return $16050 at the end of first year and $17325 at the
end of second year. Interest rate is 12% per annum. Calculate the net present value for when:
a) Interest is compounded annually.
b) Interest is compounded semi-annually.
c) Interest is compounded quarterly.
d) State decision for each part (a, b, and c) about project, it should be selected or not, why?
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Financial Theory and Corporate Policy
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
4th edition
321127218, 978-0321179548, 321179544, 978-0321127211
