A company is considering a project that will last for 4 years with no residual value. The project has the following cash flows and details: Period 0: Cash flow = -$165,000 (Cost of project) Period 1: Cash flow = $85,000, Net Income = $47,500 Period 2: Cash flow = $66,000, Net Income = $28,500 Period 3: Cash flow = $50,000 Net Income = $12,500 Period 4: Cash flow = $50,000, Net Income = $12,500 Average Book Value = $82,500 The required annual return on projects of this risk is 16%. What is the net present value of the project? NPV = $ (Round to the nearest dollar and do NOT use commas in your response)
A company is considering a project that will last for 4 years with no residual value. The project has the following cash flows and details: Period 0: Cash flow = -$165,000 (Cost of project) Period 1: Cash flow = $85,000, Net Income = $47,500 Period 2: Cash flow = $66,000, Net Income = $28,500 Period 3: Cash flow = $50,000 Net Income = $12,500 Period 4: Cash flow = $50,000, Net Income = $12,500 Average Book Value = $82,500 The required annual return on projects of this risk is 16%. What is the net present value of the project? NPV = $ (Round to the nearest dollar and do NOT use commas in your response)
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 10E: Roberts Company is considering an investment in equipment that is capable of producing more...
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A company is considering a project that will last for 4 years with no residual value. The project has the following cash flows and details:
Period 0: Cash flow = -$165,000 (Cost of project)
Period 1: Cash flow = $85,000,
Net Income = $47,500
Period 2: Cash flow = $66,000,
Net Income = $28,500
Period 3: Cash flow = $50,000
Net Income = $12,500
Period 4: Cash flow = $50,000,
Net Income = $12,500
Average Book Value = $82,500
The required annual return on projects of this risk is 16%. What is the
NPV = $ (Round to the nearest dollar and do NOT use commas in your response)
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