Question
Suppose that a company is wordering whether to invest $20,000 in a project which would make extra profits of $10,000 in the first year, $8,000
Suppose that a company is wordering whether to invest $20,000 in a project which would make extra profits of $10,000 in the first year, $8,000 in the second year and $6,000 in the third year. Its cost of capital is 10%?What is the net present value of the project?
Step by Step Solution
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Step: 1
The formula for present value is PV CF 1 rt where PV is the present value CF is t...
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Step: 2
Step: 3
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Financial Accounting A User Perspective
Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry
6th Canadian Edition
470676604, 978-0470676608
