Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

financial management please help me The Caribou Pipeline Company projects a pattern of inflows from the investment shown in the following table. The inflows are

financial management
please help me
image text in transcribed
image text in transcribed
The Caribou Pipeline Company projects a pattern of inflows from the investment shown in the following table. The inflows are spread over time to reflect delayed benefits Each year is independent of the others. Year 1 Cash Inflow Probability 50 0.40 70 8.20 90 0.40 Year 5 Cash Inflow Probability 30 0.35 70 0.30 110 0.35 Year 16 Cash Inflow Probability 20 0.30 20 0.40 120 0.30 The expected value for all three years is $70. a. Compute the standard deviation for each of the three years (Round the final answers to 2 decimal places.) Standard deviation Year 1 Year 5 Year 10 b. This part of the question is not part of your Connect assignment c. Assuming a 4 percent and 8 percent discount rate, complete the table for present value factors (Round the final answers to 3 decimal places.) Year 1 PVIT 4 Percent 0.962 PVIF 8 Percent 0.926 Difference 0.036 C. Assuming a 4 percent and 8 percent discount rate, complete the table for present value factors. (Round the final answers to 3 decimal places.) PVIF 4 Percent 0.962 Year 1 5 10 PV Percent 0.926 Difference 0.036 20 d. This part of the question is not part of your Connect assignment e-1. Assume the initial investment is $160 What is the net present value of the expected values of $70 for the investment at a 8 percent discount rate?(Round "PV Foctor" to 3 decimal places. Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to 1 decimal place.) Net present value e-2. Should the investment be accepted? ONo O Yes

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting And Financial Management For Residential Construction

Authors: Emma Shinn

6th Edition

0867187816, 9780867187816

More Books

Students also viewed these Accounting questions