An investment opportunity costing $85,000 is expected to yield net cash flows of $15,000 annually over six years A Calculate the Net Present Value of the investment at a discount rate of 12 B Does the capital expenditure appears to be a favorable investment Why not ...

A Cost of Investment 85000 Annual Net Cash Flows 15000 Discount Rate 12 Pe ...

An investment opportunity costing $85,000 is expected to yield net cash flows of $15,000 annually over six

Question:

An investment opportunity costing $85,000 is expected to yield net cash flows of $15,000 annually over six years.
A: Calculate the of the investment at a of 12%
B: Does the capital expenditure appears to be a favorable investment? Why not?
Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...