Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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NPV: Basic Concepts
Buena Vision Clinic is considering an investment that requires an outlay of $600,000 and promises a net
The
Required:
1. Break the $810,000 future cash inflow into the three components shown below. Enter all your answers as positive amounts.
a. The return of the original investment | $ 600,000 |
b. The cost of capital | $ 60,000 |
c. The profit earned on the investment | $150,000 |
2. Now, compute the present value of the profit earned on the investment.
$136,350
3. Compute the NPV of the investment. When required, round your answer to the nearest dollar.
$
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