Question
Which of the following three investments will have the highest NPV? All three cases require an initial investment of $55,000, and the required rate of
Which of the following three investments will have the highest NPV? All three cases require an initial investment of $55,000, and the required rate of return is 12%.
| A | B | C | |
| Year 1 net cash in | $26,000 | $30,000 | $34,000 |
| Year 2 net cash in | $28,000 | $30,000 | $32,000 |
| Year 3 net cash in | $32,000 | $30,000 | $28,000 |
| Year 4 net cash in | $34,000 | $30,000 | $26,000 |
| Total cash flow | $120,000 | $120,000 | 120,000 |
| All three investments will have the same NPV | ||
| Investment C | ||
| Investment A | ||
| Investment B |
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The Audit Committee Handbook
Authors: Louis Braiotta Jr.
3rd Edition
0471345768, 978-0471345763
