A company has the following net cash inflows. Today -$7000, Year 1-$15 000, Year 2-$9000, Year 3+ $12 000, Year 4-$3000, Year 5 + $19 000. Compute the net present value if the required rate of return is 7.22% compounded annually.

A company has the following net cash inflows. Today -$7000, Year 1-$15 000, Year 2-$9000, Year 3+ $12 000, Year 4-$3000, Year 5 + $19 000. Compute the net present value if the required rate of return is 7.22% compounded annually.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

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A company has the following net cash inflows. Today -$7000, Year 1-$15 000, Year 2-$9000, Year 3+ $12 000,
Year 4 -$3000, Year 5 + $19 000. Compute the net present value if the required rate of return is 7.22%
compounded annually.
a.
-$7009.89
O b. -$7409.89
O c. $4709.89
d. -$3000.00
e. -$4709.89

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