Question
QUESTIONS 1 3 GO WITH THE FOLLOWING PROBLEM: Builtrite has estimated their cost of capital is 14% and they are considering the purchase of a
QUESTIONS 1 3 GO WITH THE FOLLOWING PROBLEM: Builtrite has estimated their cost of capital is 14% and they are considering the purchase of a machine with the following capital budget:
| Initial Investment | $62,000 |
| RATFCF Year 1 | $22,000 |
| RATFCF Year 2 | $30,000 |
| RATFCF Year 3 | $38,000 |
What is the machines NPV?
| A $5,783 | ||
| B $6,014 | ||
| C $5,442 | ||
| D $4,824 |
QUESTION 2
What is the Profitability Index (PI) of this machine?
| A 1.06 | ||
| B 1.10 | ||
| C 1.19 | ||
| D 1.28 |
QUESTION 3
What is the Internal Rate of Return of this machine?
| A 19.81% | ||
| B 19.19% | ||
| C 20.81% | ||
| D 20.19% |
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Re Imagining Offshore Finance
Authors: Christopher M. Bruner
1st Edition
0190466871, 978-0190466879
