Given the following incomplete sensitivity analysis, what is the net present value of annual cash flows of $300,000? Estimated Annual Net Cash Flow $300,000 $400,000 $500,000 Present value of annual net cash flows (× 4.487) $ ?? $1,794,800 $2,243,500 Present value of residual value 24,000 24,000 24,000 Total present value $ ?? $1,818,800 $2,267,500 Amount to be invested (1,500,000) (1,500,000) (1,500,000) Net present value $ ?? $ 318,800 $ 767,500 a.$(129,900) b.$1,346,100 c.$1,322,100 d.$129,900
Given the following incomplete sensitivity analysis, what is the net present value of annual cash flows of $300,000? Estimated Annual Net Cash Flow $300,000 $400,000 $500,000 Present value of annual net cash flows (× 4.487) $ ?? $1,794,800 $2,243,500 Present value of residual value 24,000 24,000 24,000 Total present value $ ?? $1,818,800 $2,267,500 Amount to be invested (1,500,000) (1,500,000) (1,500,000) Net present value $ ?? $ 318,800 $ 767,500 a.$(129,900) b.$1,346,100 c.$1,322,100 d.$129,900
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
Related questions
Question
Given the following incomplete sensitivity analysis, what is the net present value of annual cash flows of $300,000?
| Estimated Annual Net Cash Flow | ||||||
| $300,000 | $400,000 | $500,000 | ||||
| Present value of annual net cash flows (× 4.487) | $ ?? | $1,794,800 | $2,243,500 | |||
| Present value of residual value | 24,000 | 24,000 | 24,000 | |||
| Total present value | $ ?? | $1,818,800 | $2,267,500 | |||
| Amount to be invested | (1,500,000) | (1,500,000) | (1,500,000) | |||
| Net present value | $ ?? | $ 318,800 | $ 767,500 |
a.$(129,900)
b.$1,346,100
c.$1,322,100
d.$129,900
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education