The Horizon Company will invest $60,000 in a temporary project that will generate the following cash inflows

Question:

The Horizon Company will invest $60,000 in a temporary project that will generate the following cash inflows for the next three years.
Year Cash Flow
1 ............ $15,000
2 ............ 25,000
3 ............ 40,000
The firm will also be required to spend $10,000 to close down the project at the end of the three years. If the is 10 percent, should the investment be undertaken?

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...