Empire Healthcare Corp is proposing to spend $84,434 on a 7 year project whose estimated net cash flows are $18,500 for each of the seven years a Compute the net present value , using a rate of return of 15 Use the table of present values of an annuity of $1 in the chapter b Based on the analysis p...

a Present value of annual net cash flows 18500 416 76960 Amount to be invested 8443 ...

Empire Healthcare Corp. is proposing to spend $84,434 on a 7-year project whose estimated net cash flows

Question:

Empire Healthcare Corp. is proposing to spend $84,434 on a 7-year project whose estimated net cash flows are $18,500 for each of the seven years.
a. Compute the , using a rate of return of 15%. Use the table of present values of an of $1 in the chapter.
b. Based on the analysis prepared in (a), is the rate of return
(1) More than 15%,
(2) 15%, or
(3) Less than 15%? Explain.
c. Determine the by computing a present value factor for an of $1 and using the table of the present value of an of $1 presented in the text.

Net Present Value
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