ABC Company invested in a 4 year project. The expected rate of return is 40%. Additional information on the project is as follows: Year Cash Inflow PV of 1 @ 10% 1 40,000 0.909 2 44,000 0.826 3 48,000 0.751 4 52,000 0.683 Assuming a positive NPV of 10,00, determine the amount of original investment

ABC Company invested in a 4 year project. The expected rate of return is 40%. Additional information on the project is as follows: Year Cash Inflow PV of 1 @ 10% 1 40,000 0.909 2 44,000 0.826 3 48,000 0.751 4 52,000 0.683 Assuming a positive NPV of 10,00, determine the amount of original investment

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

ABC Company invested in a 4 year project. The expected rate of return is 40%. Additional information on the project is as follows:

Year	Cash Inflow	PV of 1 @ 10%
1	40,000	0.909
2	44,000	0.826
3	48,000	0.751
4	52,000	0.683

Assuming a positive NPV of 10,00, determine the amount of original investment.

Definition Definition Transfer of funds into a company by any third party, which may happen due to any operational, investing, and financing activities. The cash inflow includes payments made by customers or investments made by the investors into the company by purchasing its equity.

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