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The market rate of return is 12 percent. What is the net present value of an investment that requires an outlay of $12000 and an

The market rate of return is 12 percent. What is the net present value of an investment that requires an outlay of $12000 and an expected cash inflow from the investment is $15000 a year from today?


2.     the market rate of return is 12%. What is the rate of return on an investment that requires an outlay of $14000 now and a cash inflow of $16700 one year from now?

 4.     The market interest rate is 12%.  What is the net present value of investment K with an outlay of $21000 and a cash inflow of $27000 a year from now?


 

3. Which of the following investments would create a value for the business equal to or greater than 10 percent? Investment A BCDEFG Cash outlay Period 1 Cash inflow period 2 $4400 $4000 $10000 $8000 $7000 $6000 $9000 $9500 $12600 $8400 $7800 $5800 $9700 $8500

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SOLUTION 1 To calculate the net present value NPV of an investment we need to discount the expected cash inflows back to their present value using the market rate of return The formula for calculating ... blur-text-image

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