An investment under consideration has a payback of seven years and a cost of $873,000. Assume the
Question:
- An investment under consideration has a payback of seven years and a cost of $873,000. Assume the cash flows are conventional.
If the required return is 11%, what is the worst-case NPV?(Negative answer should be indicated by a minus sign. Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.)
Worst-case NPV$
2 Kyoto Joe Inc. sells earnings forecasts for Japanese securities. Its credit terms are 4/15, net 60. Based on experience, 40% of all customers will take the discount.
a.What is the average collection period for Kyoto Joe?(Use 365 days a year.)
Average collection perioddays
b.If Kyoto Joe sells 1,380 forecasts every month at a price of $1,975 each, what is its average balance sheet amount in accounts receivable?Assume 365 days per year.(Do not round intermediate calculations. Round the finalanswer to 2 decimal places. Omit $ sign in your response.)
Average balance$
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th Edition
Authors: Stephen A. Ross, Randolph W. Westerfield, Bradford D.Jordan