Question: Problem 1 2 - 2 0 ( Algo ) Reinvestment rate assumption in capital budgeting [ LO 1 2 - 4 ] Turner Video will
Problem Algo Reinvestment rate assumption in capital budgeting LO
Turner Video will invest $ in a project. The firm's cost of capital is percent. The investment will provide the following inflows. Use Appendix A for an approximate answer but calculate your final answer using the formula and financial calculator methods.
The internal rate of return is percent.
Q If the relnvestment assumption of the net present value method is used, what will be the total value of the inflows after five years? Assume the Inflows come at the end of each year
Note: Do not round Intermediate calculations and round your answer to decimal places.
Total value of inflows
b If the relnvestment assumption of the Internal rate of return method is used, what will be the total value of the inflows after five years?
Note: Use the glven Internal rate of return. Do not round Intermedlate calculations and round your answer to decimal places.
Total value of inflows
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