Question
Tuna Company recently invested in a project with a 3-year life. The projects net present value was $27,000 and annual cash inflows were $63,000 for
Tuna Company recently invested in a project with a 3-year life. The projects net present value was $27,000 and annual cash inflows were $63,000 for year 1, $72,000 for year 2, and $81,000 for year 3.
| Year or Period | PV of $1 at 10% | PV of an ordinary annuity at 10% | ||||
| 1 | 0.909 | 0.909 | ||||
| 2 | 0.826 | 1.736 | ||||
| 3 | 0.751 | 2.487 | ||||
| 4 | 0.683 | 3.170 | ||||
| 5 | 0.621 | 3.791 | ||||
If Tunas hurdle rate is 10%, the initial investment for the project was:
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Forensic Analytics Methods And Techniques For Forensic Accounting Investigations
Authors: Mark J. Nigrini
2nd Edition
1119585767, 9781119585763
