25% 14,850 3,900 0(2,677,437.00) (2,677,437.00) 569,400.00 569,400.00 569,400.00 569,400.00 569,400.00 569,400.00 (996,896.17) 7.44% cal 01 772,200.00 772,200.00 772,200.00 772,200.00 772,200.00 772,200.00 (202,800.00) (202,800.00) (202,800.00) (202,800.00) (202,800.00) (202,800.00) NPV nue 1 nses 6,000,000 e 52 weeks in a year IRR O-23456
25% 14,850 3,900 0(2,677,437.00) (2,677,437.00) 569,400.00 569,400.00 569,400.00 569,400.00 569,400.00 569,400.00 (996,896.17) 7.44% cal 01 772,200.00 772,200.00 772,200.00 772,200.00 772,200.00 772,200.00 (202,800.00) (202,800.00) (202,800.00) (202,800.00) (202,800.00) (202,800.00) NPV nue 1 nses 6,000,000 e 52 weeks in a year IRR O-23456
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
Related questions
Question
100%
Show formula for answers.
Tables are in the pictures.
Transcribed Image Text:A
C
E
F
Table A-1
Table A - 2
Cash Flow
(2,677,437.00)
569,400.00
569,400.00
569,400.00
2 Initial Investment
2,677,437.00
25%
14,850
3,900
Year
Revenue
Cost
3 Cost of Capital
4 Weekly Revenue
5 Weekly Expenses
772,200.00
772,200.00
772,200.00
772,200.00
772,200.00
772,200.00
0(2,677,437.00)
(202,800.00)
(202,800.00)
(202,800.00)
(202,800.00)
(202,800.00)
(202,800.00)
6
7 Selling Price
There are 52 weeks in a year
6,000,000
4
569,400.00
569,400.00
569,400.00
(996,896.17)
7.44%
8
9
10
NPV
11
IRR
12
13
O12
Transcribed Image Text:Head of Evtel Kitchen Appliances Milos wants to work with a start-up specializing in smart home technologies to expand
EvTel's business. He asks Tolga, a new graduate hire from the R&D department, to research start-up companies. After his
research, Tolga selected BEAD Technologies to present his superiors. Help him answer the questions below so that he can
understand if they should invest in BEAD Technologies. Assume all payments are made at the end of the period.
3
After an initial investment of 2677437; they will start operating in year 1 and sell the store at the end of year 6. Use the values given in
Table A-1 to complete Table A-2, and answer Part 1 according to it.
Part 1
What is the cash flow in the first year of the business?
What is the amount of money that EvTel made over their expectation in terms of today?
What is the internal rate of return that shows Evtel made a profit equal to their expectations?
a
6.
b
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