Question
The Reading Railroad is considering a $100,000 investment in either of two companies. Both projects are expected to have a 10-year life. The annual cash
The Reading Railroad is considering a $100,000 investment in either of two companies. Both projects are expected to have a 10-year life. The annual cash flows for the following 10 years are as follows: Year Electric Co Water Works 1 $70,000 $15,000 2 $15,000 $15,000 3 $15,000 $70,000 4-10 $10,000 $10,000
c) Calculate the NPV of the Electric Co investment given that Reading Railroad has a cost of capital = 8%. (4 Marks)
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Stock Market Investing For Beginners
Authors: Andrew P.C.
1st Edition
1549522132, 978-1549522130
