A risky $400,000 investment is expected to generate the following cash flows: 1 $136,200 2 $166,225...

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A risky $400,000 investment is expected to generate the following cash flows: 1 $136,200 2 $166,225 Year a. If the firm's cost of capital is 9 percent, should the investment be made? negative value, if any. Round your answer to the nearest dollar. NPV: $ The investment -Select- 3 $158,138 be made. 4 $134,600 The investment -Select- be made. b. An alternative use for the $400,000 is a four-year U.S. Treasury bond that pays $24,000 annually and repays the $400,000 at maturity. Management believes that the cash inflows from the risky investment are equivalent to only 65 percent of the certain investment, which pays. 6 percent. Should the investment be made? Do not round other intermediate calculations. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. NPV: $ Use a minus sign to enter a A risky $400,000 investment is expected to generate the following cash flows: 1 $136,200 2 $166,225 Year a. If the firm's cost of capital is 9 percent, should the investment be made? negative value, if any. Round your answer to the nearest dollar. NPV: $ The investment -Select- 3 $158,138 be made. 4 $134,600 The investment -Select- be made. b. An alternative use for the $400,000 is a four-year U.S. Treasury bond that pays $24,000 annually and repays the $400,000 at maturity. Management believes that the cash inflows from the risky investment are equivalent to only 65 percent of the certain investment, which pays. 6 percent. Should the investment be made? Do not round other intermediate calculations. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. NPV: $ Use a minus sign to enter a

Answer rating: 100% (QA)

To calculate the Net Present Value NPV for both scenarios you can use the formula NPV sum CFt1rt igh... View the full answer