MYUSF* My Horne2 CengageNOWv2 |Online teachin Xgagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inpro...to伯Vanessa Company is evaluating a project requiring a capital expenditure of $480,000. The project has an estimated life of 4 years and no salvage value.The estimated net income and net cash flow from the project are as followS:YearNet IncomeNet Cash Flow$90,000$210,00080,000200,0003.40,000160,000430,000150,000$240,000$720,000The company's minimum desired rate of return for net present value analysis is 15%. The factors for the present value of $1 at compound interest of15% for 1, 2, 3, and 4 years are 0.870, 0.756, 0.658, and 0.572, respectively.Determine (a) the average rate of return on investment and (b) the net present value for the project.a. Average rate of return on investmentb. Net present valueNext,(Previous10:00 PM5/8/2021%241.

Average rate of return = Average net income/Average investment Average investment = Initial…

15% for 1, 2, 3, and 4 years are 0.870, 0.756, 0.658, and 0.572, respectively. Determine (a) the average rate of return on investment and (b) the net present value for the project. a. Average rate of return on investment % b. Net present value

15% for 1, 2, 3, and 4 years are 0.870, 0.756, 0.658, and 0.572, respectively. Determine (a) the average rate of return on investment and (b) the net present value for the project. a. Average rate of return on investment % b. Net present value

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

MYUSF
* My Horne
2 CengageNOWv2 |Online teachin X
gagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inpro...
to
伯
Vanessa Company is evaluating a project requiring a capital expenditure of $480,000. The project has an estimated life of 4 years and no salvage value.
The estimated net income and net cash flow from the project are as followS:
Year
Net Income
Net Cash Flow
$90,000
$210,000
80,000
200,000
3.
40,000
160,000
4
30,000
150,000
$240,000
$720,000
The company's minimum desired rate of return for net present value analysis is 15%. The factors for the present value of $1 at compound interest of
15% for 1, 2, 3, and 4 years are 0.870, 0.756, 0.658, and 0.572, respectively.
Determine (a) the average rate of return on investment and (b) the net present value for the project.
a. Average rate of return on investment
b. Net present value
Next,
(Previous
10:00 PM
5/8/2021
%24
1.

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