1st year 2nd year 3rd year Sales 150 120 80 Costs 50 30 10 The new production facility is going to cost 300 million and be ready for production immediately but will only run for three years however it then will be able to sell its production facility to another company for 120 million If the company’s cost of capital is 12% and all cash flows occur at the end of the year Calculate the NPV for this project
1st year 2nd year 3rd year Sales 150 120 80 Costs 50 30 10 The new production facility is going to cost 300 million and be ready for production immediately but will only run for three years however it then will be able to sell its production facility to another company for 120 million If the company’s cost of capital is 12% and all cash flows occur at the end of the year Calculate the NPV for this project
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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1st year 2nd year 3rd year Sales 150 120 80 Costs 50 30 10 The new production facility is going to cost 300 million and be ready for production immediately but will only run for three years however it then will be able to sell its production facility to another company for 120 million If the company’s cost of capital is 12% and all cash flows occur at the end of the year Calculate the NPV for this project
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