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Chapter 16 AK and Keota (V&K) is considering an investment opportunity. T he investment requires useful life of three end$12,885.48 to acquire a piece of

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Chapter 16 AK and Keota (V&K) is considering an investment opportunity. T he investment requires useful life of three end$12,885.48 to acquire a piece of asset The asset will have an expected years and no salvage value. This investment will generate expected cash inflows of $5,000 for the next threeyears. V&K has established a 6% minimum rate of return for all investments. sp per year Required Use Present Value Appendix Table 1 to determine the total present value of all cash inflows of the investment opportunity a. Year Cash inflow PV factor Present value Total Use Present Value Appendix Table 2 to determine the total present value of all cash inflows of the investment opportunity. b. c. Calculate the net present value of the investment opportunity. Should V8k accept the investment? d. Calculate the internal rate of return of the investment opportunity. Calculate the payback period of the investment. e. f. Assuming straight-li ne depreciation for the asset, calculate the amount of annual increase i How much is the investment's unadjusted rate of return

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