Question
BBuiltrite has estimated their cost of capital is 14% and they are considering the purchase of a machine with the following capital budget: Initial Investment
BBuiltrite has estimated their cost of capital is 14% and they are considering the purchase of a machine with the following capital budget:
| Initial Investment | $62,000 |
| RATFCF Year 1 | $22,000 |
| RATFCF Year 2 | $30,000 |
| RATFCF Year 3 | $38,000 |
A )What is the machines NPV?
B) What is the Profitability Index (PI) of this machine?
C)What is the Internal Rate of Return of this machine?
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Elements Of Structured Finance
Authors: Ann Rutledge, Sylvain Raynes
1st Edition
0195179986, 978-0195179989
