Consider the following information about a project:PROJECTYEAR OYEAR 1YEAR 2YEAR 3 YEAR 4COSTS$160,000$43,000$50,000$50,000$64,000BENEFITS$0$400,000$400, 000 $500,000 $500,000a) Calculate the NPV assuming 10% discount rateb) Determine in which year will be the paybackc) Calculate (ROI)?Provide the detail answer for your calculation.

Net Present Value: It represents the difference between the present worth of annual cash flows and…

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a) Calculate the NPV assuming 10% discount rate b) Determine in which year will be the payback c) Calculate (ROI)?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Consider the following information about a project:
PROJECT
YEAR O
YEAR 1
YEAR 2
YEAR 3 YEAR 4
COSTS
$160,000
$43,000
$50,000
$50,000
$64,000
BENEFITS
$0
$400,000
$400, 000 $500,000 $500,000
a) Calculate the NPV assuming 10% discount rate
b) Determine in which year will be the payback
c) Calculate (ROI)?
Provide the detail answer for your calculation.

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