Question
An investment that costs $5,000 will produce annual cash flows of $3,000 for 3 years. Using a required return of 8%, the investment will generate
An investment that costs $5,000 will produce annual cash flows of $3,000 for 3 years. Using a required return of 8%, the investment will generate a NPV of $_________________ (rounded to nearest dollar).
Present Value of 1
|
| Rate |
|
|
|---|---|---|---|
| Periods | 7% | 8% | 9% |
| 1 | 0.9346 | 0.9259 | 0.9174 |
| 2 | 0.8734 | 0.8573 | 0.8417 |
| 3 | 0.8163 | 0.7938 | 0.7722 |
| 4 | 0.7629 | 0.7350 | 0.7084 |
| 5 | 0.7130 | 0.6806 | 0.6499 |
Present Value of an Annuity of 1
|
| Rate |
|
|
|---|---|---|---|
| Periods | 7% | 8% | 9% |
| 1 | 0.9346 | 0.9259 | 0.9174 |
| 2 | 1.8080 | 1.7833 | 1.7591 |
| 3 | 2.6243 | 2.5771 | 2.5313 |
| 4 | 3.3872 | 3.3121 | 3.2397 |
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Wiley CPAexcel Exam Review Focus Notes Auditing And Attestation 2022
Authors: Wiley
1st Edition
111984858X, 978-1119848585
