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Henrico Company has two investment opportunities. Both investments cost $5,100 and will provide the same total future cash inflows. The cash receipt schedule for each
Henrico Company has two investment opportunities. Both investments cost $5,100 and will provide the same total future cash inflows. The cash receipt schedule for each investment is given below:
Investment I | Investment II | |||
Period 1 | $ | 1,050 | $ | 1,050 |
Period 2 | 1,050 | 2,060 | ||
Period 3 | 2,050 | 3,070 | ||
Period 4 | 4,080 | 2,050 | ||
Total | $ | 8,230 | $ | 8,230 |
The net present value of Investment II assuming an 10% minimum rate of return would be which of the following amounts? (Do not round your PV factors and intermediate calculations. Round your answer to the nearest whole dollar.)
$6,364 | |
$6,149 | |
$1,264 | |
$8,230 |
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