Question
Cavu Air Inc., a drone manufacturer, is reviewing its annual budget. It is considering investments in three different technologies. Consider the following cash flows of
Cavu Air Inc., a drone manufacturer, is reviewing its annual budget. It is considering investments in three different technologies. Consider the following cash flows of the three independent projects. Assume a discount rate of 9% percent. The company has $20 million to invest in projects this year.
Required return is 9%
Annual cash flows
| Projects | A | B | C |
| Year 0 | $ (7,500,000) | $ (10,500,000) | $ (20,000,000) |
| Year 1 | $14,000,000 | $10,000,000 | $18,000,000 |
| Year 2 | $6,000,000 | $25,000,000 | $32,000,000 |
| Year 3 | $3,500,000 | $22,500,000 | $15,000,000 |
Based on the NPV, rank these investments.
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Day Trading Strategies And Risk Management
Authors: Richard N. Williams
1st Edition
979-8863610528
