Question: ose eBook * NPU: Basic Concepts Buena Vision Clinic is considering an investment that requires an outlay of $600,000 and promises a net cash inflow
ose eBook * NPU: Basic Concepts Buena Vision Clinic is considering an investment that requires an outlay of $600,000 and promises a net cash inflow one year from now of 5810,000. Assume the cost of capitalis 10 percent The present value tables provided in Exhibit 198.1 and Exhibit 1982 must be used to solve the following problems Required: 1. Break the $10,000 future cash inflow into the three components shown below. Enter all your answers as positive amounts. a. The return of the original Investment 600,000 b. The cost of capital 60,000 c. The profit earned on the investment 150,000 2. Now, compute the present value of the profit eamed on the investment 136,364 X 3. Compute the NPV of the Investment. When required, round your answer to the nearest dollar 136,364 X Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NOV? Net present value represents the present value of future profits
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