Accounting Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1 0.926 0.917 0.909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $330000 and is expected to generate cash inflows of $190000 at the end of each year for three years. The net present value of this project is

Accounting Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1 0.926 0.917 0.909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $330000 and is expected to generate cash inflows of $190000 at the end of each year for three years. The net present value of this project is

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

See similar textbooks

Similar questions

Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a net cash inflow one year from now of 810,000. Assume the cost of capital is 10 percent. Required: 1. Break the 810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?
Use the following table for this questio Present value of an Annuity of $1 Periods 8% 9% 10% 1 .926 .917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 9% and is considering investing in a project which costs $25,000 and is expected to generate cash inflows of $10,000 at the end of each year for three years. The net presentvalue of this project is: a. $25,310 b. $15,000 c. $9,170 d. $5,310
Use the following table:                      Present Value of an Annuity of 1 Period                8%             9%            10% 1                        .926           .917           .909 2                      1.783         1.759         1.736 3                    2.577         2.531         2.487 A company has a minimum required rate of return of 8%. It is considering investing in a project that costs $111,915 and is expected to generate cash inflows of $45,000 each year for three years. The approximate internal rate of return on this project is a)8% B)9% C)10% D)less than the required 8%.
Which is the correct answer? Use the following table for this question Present value of an Annuity of $1   Periods             8%               9%            10% 1                     .926          .917            .909 2                     1.783          1.759             1.736 3                     2.577         2.531           2.487 A company has a minimum required rate of return of 9% and is considering investing in a project which costs $25,000 and is expected to generate cash inflows of $10,000 at the end of each year for three years. The net presentvalue of this project is: a. $25,310                      b. $15,000                      c. $9,170                         d. $5,310
Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1 0.926   0.917   0.909   2 1.783   1.759   1.736   3 2.577   2.531   2.487   A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $300000 and is expected to generate cash inflows of $140000 at the end of each year for three years. The net present value of this project is A. $354340. B. $54340. C. $70000. D. $35434.
1. Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1 0.926 0.917 0.909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $300000 and is expected to generate cash inflows of $120000 at the end of each year for three years. The net present value of this project is a. $3720. b. $303720. c. $30372. d. $60000. 2. Pierre’s Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $271,000. A new salon will normally generate annual revenues of $64,015, with annual expenses (including depreciation) of $41,200. At the end of 15 years the salon will have a salvage value of $80,000.Calculate the annual rate of return on the project. Annual rate of return enter the Annual rate of return in percentages %?
Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1.926.917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years. The net present value of this project is ? $354,340. $4,340. $70,000. $35,436.
Castle Company is considering an investment opportunity with the following expected net cash inflows: Year 1, $225,000; Year 2, $165,000; Year 3, $120,000. The company uses a discount rate of 9% and the initial investment is $325,000. F(Click the icon to view Present Value of $1 table.) (Click the icon to view Present Value of Ordinary Annuity of $1 table.) Calculate the NPV of the investment. Should the company invest in the project? Why or why not? Use the following table to calculate the net present value of the project. (Enter any factor amounts to three decimal places, X.XXX.) Net Cash Inflow PV Factor (i = 9%) Years Year 1 Year 2 Year 3 Present value of each year's inflow: (n = 1) Present value of each year's inflow: (n=2) Present value of each year's inflow: (n = 3) Total PV of cash inflows Year 0 Initial investment Net present value of the project example Get more help. Present Value Reference Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8…
Myca Corporation has a project with the following cash flows. What is the value of the cash flows today assuming an annual interest rate of 9.1 percent? Year Cash Flow 1 $ 1,640 2 2,030 3 2,325 4 2,335
Caldwell Corporation is considering an investment proposal that will require an initial outlay of $814,000 and would yield yearly cash inflows of $202.000 for nine years. The company uses a discount rate of 10% What i the NPV of the investment? Present value of an ordinary annuity of $1 0% 9% 10% 1 2 3 S 6 7 0 0926 1.783 2.577 3.312 3.993 4623 5.200 5.033 5747 5.830 6247 0917 1759 2531 324 OA. $255.000: OB. $353,500 OC. $349.316 OD. 5407.000 389 4.406 0.909 1.736 2407 3.17 3.791 4.355 4066 5.335 5.995 5.759
A certain project which requires an investment of P 80,000 will produce cash savings after taxes of P 20,000 for 8 years. The present value of an annuity of 1 for 8 years at various rates are shown below. 15% 16% 18% 20% 4.487 4.344 4.078 3.837 What is the exact IRR? 19.53% 19.35% 18.65% 18.56%