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Turner Video will invest $78,500 in a project. The firms cost of capital is 14 percent. The investment will provide the following inflows. Year Inflow
Turner Video will invest $78,500 in a project. The firms cost of capital is 14 percent. The investment will provide the following inflows.
Year | Inflow | ||
1 | $ | 25,000 | |
2 | 27,000 | ||
3 | 31,000 | ||
4 | 35,000 | ||
5 | 39,000 | ||
The internal rate of return is 18 percent.
a. If the reinvestment assumption of the net present value method is used, what will be the total value of the inflows after five years? (Assume the inflows come at the end of each year.) (Do not round intermediate calculations and round your answer to 2 decimal places.)
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