accounting problem

Project Description:

1) jared smithers was faced with a particularly difficult decision. his aunt lucy johnson has offered jared the opportunity to help fund her new beauty shop. she has asked him to invest $100,000 immediately in her business. she convinces him that the cash flow of such an investment would result in positive cash flows of $21,000 per year for at least 7 years. jared’s hurdle rate is 8%.
using sound capital budgeting techniques for support your recommendation, help jared out on his first major decision. jared has the money to invest currently in a cd due to mature on november 30.

2) an invest opportunity costing $85,000 is expected to yield net cash flows of $25,000 annually for five years.
if the cost of capital is 12% the net present value of the investment is _____
the payback period in years is ____
the internal rate of return is about ____ percent
3) if the target rate of return is 14% and an investment opportunity costing $75,000 provides yearly cash flows of $25,000 in year 1; $23,000 in years 2 and 3; and $17,000 in year 4, what should an investor do and why? the investment is considered relatively safe.
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Price Type: Fixed

Project Budget: $0 to $10
Total Proposals: 6
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