The following investment alternatives have been presented: Net investment Cash net returns per Economic life annum...
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The following investment alternatives have been presented: Net investment Cash net returns per Economic life annum Alternative A P400,000 240,000 13 years 10560,000 Replacement cost after 3 years Cash net returns per annum from replacement (4 years) The minimum desired rate of return is 20% for both alternatives. 360,000 Alternative B P720,000 300,000 7 years REQUIRED: 1. Determine the net present value of both alternatives. The following investment alternatives have been presented: Net investment Cash net returns per Economic life annum Alternative A P400,000 240,000 13 years 10560,000 Replacement cost after 3 years Cash net returns per annum from replacement (4 years) The minimum desired rate of return is 20% for both alternatives. 360,000 Alternative B P720,000 300,000 7 years REQUIRED: 1. Determine the net present value of both alternatives.
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To determine the net present value NPV of each alternative we need to calculate the present value PV ... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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