1.Determine the missing values represented by K, L, M, and N in Table 5. A K = 0.8929; L = R196 438; M = 0.7118 and N = R213 540 B K = 0.9009; L = R198 198; M = 0.7312 and N = R219 360 C K = 0.9174; L = R201 828; M = 0.7722 and N = R231 660 D K = 0.8929; L = R196 438; M = 0.7722 and N = R231 540 2.Calculate the total present value of the net cash flows from the investment opportunity. A R859 028 B R902 575 C R838 510 D R866 704 3. If the Net Present Value of the investment opportunity is an unfavourable R11 490, what is the initial outlay? A R811 490
1.Determine the missing values represented by K, L, M, and N in Table 5. A K = 0.8929; L = R196 438; M = 0.7118 and N = R213 540 B K = 0.9009; L = R198 198; M = 0.7312 and N = R219 360 C K = 0.9174; L = R201 828; M = 0.7722 and N = R231 660 D K = 0.8929; L = R196 438; M = 0.7722 and N = R231 540 2.Calculate the total present value of the net cash flows from the investment opportunity. A R859 028 B R902 575 C R838 510 D R866 704 3. If the Net Present Value of the investment opportunity is an unfavourable R11 490, what is the initial outlay? A R811 490
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
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Question
1.Determine the missing values represented by K, L, M, and N in Table 5.
A K = 0.8929; L = R196 438; M = 0.7118 and N = R213 540
B K = 0.9009; L = R198 198; M = 0.7312 and N = R219 360
C K = 0.9174; L = R201 828; M = 0.7722 and N = R231 660
D K = 0.8929; L = R196 438; M = 0.7722 and N = R231 540
2.Calculate the total
A R859 028
B R902 575
C R838 510
D R866 704
3. If the
A R811 490
B R850 000
C R848 510
D R860 000
Transcribed Image Text:The projected annual net cash flows associated with an investment opportunity are shown below in Table 5. The expected
rate of return on the investment is 12%.
Year
Future Cash flows
1
220 000
2
250 000
3
300 000
4
200 000
5
180 000
Table 5: Annual net cash flows of the investment opportunity.
сл
Discount factor
K
0.7972
M
0.6355
0.5674
Present Values
L
199 300
N
127 100
102 132
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