Question: Problem 1 2 - 2 0 ( Algo ) Reinvestment rate assumption in capital budgeting [ LO 1 2 - 4 ] Turner Video will

Problem 12-20(Algo) Reinvestment rate assumption in capital budgeting [LO12-4]
Turner Video will invest $94.500 in a project. The firm's cost of capital is 10 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 15 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 2 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 2 decimal places.
Total value of inflows
 Problem 12-20(Algo) Reinvestment rate assumption in capital budgeting [LO12-4] Turner Video

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