A project has estimated annual net cash flows of $80,000 for seven years and is estimated to
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A project has estimated annual net cash flows of $80,000 for seven years and is estimated to cost $325,000. Assume a minimum acceptable rate of return of 6%. Using the present value of an annuity table appearing in Exhibit 5 of this chapter, determine
(a) The net present value of the project
(b) The present value index, rounded to two decimal places.
Net Present ValueWhat 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... Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...
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