Question
Snowbound Tours is considering investing $3,850,000 in a new lodge on the Tanana River. Management projects 15 years of cash flows per the chart below.
Snowbound Tours is considering investing $3,850,000 in a new lodge on the Tanana River. Management projects 15 years of cash flows per the chart below. Using a discount rate of 11.45%, management should:
| Year | Cash Flow | Year | Cash Flow |
| 1 | 190,000 | 9 | 875,000 |
| 2 | 270,000 | 10 | 820,000 |
| 3 | 355,000 | 11 | 685,000 |
| 4 | 480,000 | 12 | 590,000 |
| 5 | 610,000 | 13 | 545,000 |
| 6 | 785,000 | 14 | 480,000 |
| 7 | 850,000 | 15 | 310,000 |
| 8 | 915,000 |
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Investments
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
7th Edition
007331465X, 978-0073314655
