Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investment of$175today is expected to bring the future cash flows for years 1 to 4 shown below. After the 4th year cash flows are

An investment of$175today is expected to bring the future cash flows for years 1 to 4 shown below.After the 4th year cash flows are expected to grow at the given long term growth rate forever.Find the NPV, IRR, & payback period of the investment.

Inputs Discount rate35.0%. Long term growth rate 4.0%

Period 0 12 3 4

Cash flows($175.00)$125.00$80.00$200.00$210.00

Net Present ValueUse the NPV

Internal Rate of ReturnUse the IRR function

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

Real Estate Finance

Authors: John P. Wiedemer, ‎ Keith J. Baker

9th edition

324181426, 324181425, 978-0324181425

More Books

Students also viewed these Finance questions

Question

Why are contingency plans important?

Answered: 1 week ago