Corporation plans to invest $500,000 in a project that will produce after tax cash flows of...
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Corporation plans to invest $500,000 in a project that will produce after tax cash flows of $125,000 per year for the next four years. The project has a positive net present value of $5,875 assuming an 8% hurdle rate. Discount factors for 8% are as follows: Discount factors, PV of $1 @ 8% Year 1 Year 2 Year 3 0.9259 Year 4 0.8573 0.7938 Discount PV of an annuity @ 8% 0.7350 Year 1 Year 2 Year 3 0.9259 1.7832 Year 4 Expressed as a percentage, what is the salvage value of the project? 2.5770 3.3120 Corporation plans to invest $500,000 in a project that will produce after tax cash flows of $125,000 per year for the next four years. The project has a positive net present value of $5,875 assuming an 8% hurdle rate. Discount factors for 8% are as follows: Discount factors, PV of $1 @ 8% Year 1 Year 2 Year 3 0.9259 Year 4 0.8573 0.7938 Discount PV of an annuity @ 8% 0.7350 Year 1 Year 2 Year 3 0.9259 1.7832 Year 4 Expressed as a percentage, what is the salvage value of the project? 2.5770 3.3120
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Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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