Skyline Corp. will invest $260,000 in a project that will not begin to produce returns until the end of the 3rd year. From the end of the 3rd year until the end of the 12th year (10 periods), the annual cash flow will be $51,000.
Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. Calculate the net present value if the cost of capital is 12 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
Skyline Corp. will invest $260,000 in a project that will not begin to produce returns until the end of the 3rd year. From the end of the 3rd year until the end of the 12th year (10 periods), the annual cash flow will be $51,000.
Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. Calculate the net present value if the cost of capital is 12 percent. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
Unlock all answers
Related questions
| Aerospace Dynamics will invest $135,000 in a project that will produce the following cash flows. The cost of capital is 11 percent. (Note that the fourth yearâs cash flow is negative.) Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. |
| Year | Cash Flow | |||
| 1 | $ | 46,000 | ||
| 2 | 54,000 | |||
| 3 | 68,000 | |||
| 4 | (53,000 | ) | ||
| 5 | 120,000 | |||
| a. | What is the net present value of the project? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) |
| Net present value | $ |
| b. | Should the project be undertaken? | ||||
|
