Question: Problem 4. (20 Pts) Nu Things, Inc., is considering an investment in a business venture with the following anticipated cash flow results Cash Flow $70,000

 Problem 4. (20 Pts) Nu Things, Inc., is considering an investment

Problem 4. (20 Pts) Nu Things, Inc., is considering an investment in a business venture with the following anticipated cash flow results Cash Flow $70,000 20,000 19,000 18,000 17,000 16,000 Cash Flow 14,000 13,000 12,000 1,000 10,000 9,000 8,000 Cash Flow ,000 6,000 ,000 4,000 3,000 2,000 1,000 EOY EOY EOY 15 16 17 18 10 13 20 Assume MARR is AAA+5 percent per year a) Based on a present worth analysis, (1) determine the investment's worth, (2) state whether or not your results indicate the investment should be undertaken, and (3) state the decision rule you used to arrive at this conclusion b) Based on a future worth analysis, (1) determine the investment's worth, (2) state whether or not your results indicate the investment should be undertaken, and (3) state the decision rule you used to arrive at this conclusion c) Plot a graph of PW versus MARR, where MARR varies from 0 percent to 50 percent by 1 percent increments. PW should be on the y-axis and MARR on the x-axis d) Explain the significance of the y-axis intercept

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!