Question 3 Longlife Publishers is considering the purchase of a printer. The cash flows associated with...
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Question 3 Longlife Publishers is considering the purchase of a printer. The cash flows associated with the printer is given below: Year 0 Cash Flow ($2 000) 1 2 3 900 1100 1 300- a. Calculate the payback period for the printer. (2 marks) b. Calculate the discounted payback period for the printer. (5 marks) C. Calculate the Net Present Value of the printer. if the firm's cost of capital is 10%. (6 marks) d. What is the project's internal rate or return? (6 marks) e. Determine the Profitability Index of the printer. (3 marks) f. Should Longlife accept this printer and why? (3 marks) Question 3 Longlife Publishers is considering the purchase of a printer. The cash flows associated with the printer is given below: Year 0 Cash Flow ($2 000) 1 2 3 900 1100 1 300- a. Calculate the payback period for the printer. (2 marks) b. Calculate the discounted payback period for the printer. (5 marks) C. Calculate the Net Present Value of the printer. if the firm's cost of capital is 10%. (6 marks) d. What is the project's internal rate or return? (6 marks) e. Determine the Profitability Index of the printer. (3 marks) f. Should Longlife accept this printer and why? (3 marks)
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Answer rating: 100% (QA)
a To calculate the payback period for the printer we need to determine the time it takes for the cumulative cash flows to equal or exceed the initial investment Year 0 2000 Year 1 900 Year 2 1100 Year ... View the full answer
Related Book For
Fundamentals Of Financial Management
ISBN: 9780273713630
13th Revised Edition
Authors: James Van Horne, John Wachowicz
Posted Date:
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