Answered step by step
Verified Expert Solution
Question
1 Approved Answer
. Calculate the Payback Period given the following data: months yrs. & Cumulative Net Cash Flows ($113,000) Year Initial Investment 1 2 3 4 5
. Calculate the Payback Period given the following data: months yrs. & Cumulative Net Cash Flows ($113,000) Year Initial Investment 1 2 3 4 5 6 7 Net Cash Flow Per Year ($113,000) 15,000 18,000 20,000 30,000 20,000 7,000 9,000 + Present Value - Initial Investment = Use the partial chart below to determine the net present value of an asset whose initial cost is $80,000 and will generate an annual net cash flow of $12,000 for ten years. The discount rate or the cost of capital is 12%. Year 1 Year 2 Year 3 Year 4 Year 5 12% 0.89286 0.79719 0.71178 0.63552 0.56743 Year 6 Year 7 Year a 0.50663 0.45235 40299 use the partial chart below to determine the net present value of an asset whose initial cost is $80,000 and will generate an annual net cash flow of $12,000 for ten years. The discount rate or the cost of capital is 12%. Year 1 Year 2 Year 3 Year 4 Year 5 12% 0.89286 0.79719 0.71178 0.63552 0.56743 Year 6 Year 7 Year 8 Year 9 Year 10 0.50663 0.45235 0.40388 0.36061 0.32197 Should the company purchase the asset? Yes, No
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started