Ivanhoe Industries management is planning to replace some existing machinery in its plant. The cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses an 18 percent discount rate for projects like this. Should management go ahead with the project? Year Cash Flow 0 -$3,046,900 1 803,710 2 889,200 3 1,247,600 4 1,285,160 5 1,576,500 What is the NPV of this project? - NPV $?
Ivanhoe Industries management is planning to replace some existing machinery in its plant. The cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses an 18 percent discount rate for projects like this. Should management go ahead with the project? Year Cash Flow 0 -$3,046,900 1 803,710 2 889,200 3 1,247,600 4 1,285,160 5 1,576,500 What is the NPV of this project? - NPV $?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 6EB: The management of Ryland International Is considering Investing in a new facility and the following...
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Ivanhoe Industries management is planning to replace some existing machinery in its plant. The cost of the new equipment and the resulting cash flows are shown in the accompanying table. The firm uses an 18 percent discount rate for projects like this. Should management go ahead with the project?
| Year | Cash Flow | |
|---|---|---|
|
0
|
-$3,046,900 | |
|
1
|
803,710 | |
|
2
|
889,200 | |
|
3
|
1,247,600 | |
|
4
|
1,285,160 | |
|
5
|
1,576,500 |
What is the
- NPV $?
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