Ironwood Charities is considering an investment in one of their buildings that is expected to return the following cash flows: Use Exhibit A.8. Year 1 4Nm & in 2 3 4 5 Net Cash Flow $ 15,000 27,000 43,000 58,000 48,000 This schedule includes all cash inflows from the project, which will also require an immediate $152,000 cash outlay. The organization is tax-exempt; therefore, taxes need not be considered. Required: a. What is the net present value of the project if the appropriate discount rate is 8 percent? b. What is the net present value of the project if the appropriate discount rate is 4 percent? Complete this question by entering your answers in the tabs below. Required A Required B What is the net present value of the project if the appropriate discount rate is 8 percent? Note: Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign. Net present value < Required A Required B >
Ironwood Charities is considering an investment in one of their buildings that is expected to return the following cash flows: Use Exhibit A.8. Year 1 4Nm & in 2 3 4 5 Net Cash Flow $ 15,000 27,000 43,000 58,000 48,000 This schedule includes all cash inflows from the project, which will also require an immediate $152,000 cash outlay. The organization is tax-exempt; therefore, taxes need not be considered. Required: a. What is the net present value of the project if the appropriate discount rate is 8 percent? b. What is the net present value of the project if the appropriate discount rate is 4 percent? Complete this question by entering your answers in the tabs below. Required A Required B What is the net present value of the project if the appropriate discount rate is 8 percent? Note: Round PV factor to 3 decimal places. Negative amount should be indicated by a minus sign. Net present value < Required A Required B >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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