You are considering an investment project that will provide the following receipts/ disbursements. You will pay $5,000
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Question:
You are considering an investment project that will provide the following receipts/ disbursements.
You will pay $5,000 immediately and receive $2000 each year for three years, starting two years from today and receive $3000 each year for two years beginning 6 years from today. The investment will require an additional $2,50 be invested in year 5.
If you assume a discount rate of 7.0%, the present value of this investment is
a.)$1250.15
b.)$1990.07
c.)$-1990.07
d.)$-1250.15
Therefore, it is wise
a.) not to invest
b.)negative
c.)zero
d.)invest
In this project because it shows
a.) not to invest
b.)negative
c.)zero
d.)invest
e.)positive
net present value (NPV).
Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
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