Question: Given the following information, a required return of 8%, an initial investment of $45,000, and cash flows of $12,000, $20,000, $10,000 and $6,000 for years

Given the following information, a required return of 8%, an initial investment of $45,000, and cash flows of $12,000, $20,000, $10,000 and $6,000 for years 1-4 respectively, should the investment be done? Discuss.

Step by Step Solution

★★★★★

3.38 Rating (157 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Year cash flow PVF8n year present value 0 45000 1 45000 1 12000 0926 111... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1019-B-C-A-C-A(2506).docx

120 KBs Word File

Students Have Also Explored These Related Cost Accounting Questions!

Suppose you are given the following information. The beta of company i, bi, is 1.1, the risk-free rate, rRF, is 7 percent, and the expected market premium, rM - rRF, is 6.5 percent. (Assume that ai =...

Suppose you are given the following information. The beta of company i, b (i), is 1.1, the risk free rate, r(rf), is 7 percent, and the expected market premium, r(m) - r(rf), is 6.5 percent. (Assume...

Given the following information, what is the expected return on a portfolio which is invested 60 percent in stock A and 40 percent in stockB? State of Probabillity of Return if State Occurs Ecoomy...

Part 11. Encircie yout final answer. 45 paints Lorene, Incy a manufacturer of dance and exercise apparel, is considering replacing an existing piece of equipment with a more sophisticated machine, In...

Merrill Corp. has the following information available about a potential capital investment: Initial investment Annual net income Expected life Salvage value Merrill's cost of capital $ 800,000 $...

Sarasota Company has hired a consultant to propose a way to increase the companys revenues. The consultant has evaluated two mutually exclusive projects with the following information provided for...

please show steps to calculations it will help me understand better thank you Help Merrill Corp. has the following information available about a potential capital investment: Initial investment $ 1,...

A B $75,000.00 5.50% 5 7.75% 1 Turquoise Oasis Spa 2 Investment Analysis 3 4 Bond Details 5 Par Value 6 Coupon Rate 7 Maturity (in years) 8 Coupon Payment (annually) 9 Yield to Maturity (YTM) 10...

Merrimack Clinic plans to purchase a new centrifuge machine for its Idaho facility. The machine costs $437,000 and is expected to have a useful life of 8 years, with a terminal disposal value...

2. Assume the following latencies: PC 5ps I-Mem Add 200ps 70ps 30ps 80ps PC Read address a. If we only need to fetch consecutive instructions what would the cycle time be? b. Given the datapath below...

In an intrinsic semiconductor the energy gap Egis 1.2 eV. Its hole mobility is much smaller than electron mobility and independent of temperature. What is the ratio between conductivity at 600K and...

P20.10 (LO 2) (Lessee Computations and Entries, Lease with Unguaranteed Residual Value) Assume the same data as in P20.9, with JAL (JPN) having an incremental borrowing rate of 8%. Instructions a....

5. If money is not an economic resource, why is interest paid and received for its use? What considerations account for the fact that interest rates differ greatly on various types of loans? Use...

(a) By direct differentiation of H = U + P V, obtain a relation between (H/U)p and (U/V)p (b) Confirm that (H/U)p = I + p(V/U)p by expressing (H/U)p as the ratio of two derivatives with respect to...

Calculate the work done during the isothermal reversible expansion of a gas that satisfies the virial equation of state, eqn 1.19. Evaluate (a) The work for 1.0 mol Ar at 273 K (for data, see Table...

A gas obeying the equation of state p(V-nb) = nRT is subjected to a Joule- Thomson expansion. Will the temperature increase, decrease, or remain the same?

what was the issue that court trying to find 2 2 . 2 ( Genesis Health Clubs, Inc. v . LED Solar and light co )

The following data was obtained from 6 months of traffic accident records in the north direction and the south direction of the NJ turnpike. The variable "total number of fatal and non-fatal crashes"...

Using the apple 1 0 - k Step 1 : Calculate Ratios Use the same company and 1 0 - K you worked with in Week 2 Download this Excel template Download this Excel templateand fill out the first tab, the...