3. Becktell Industries has an offer to build a special product for the state highway patrol. The contract will cover a period of 10 years. The projected cash flows associated with the contract are given below: Required: Complete an analysis to calculate the net present value of the above cash flows.
3. Becktell Industries has an offer to build a special product for the state highway patrol. The contract will cover a period of 10 years. The projected cash flows associated with the contract are given below: Required: Complete an analysis to calculate the net present value of the above cash flows.
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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| 3. Becktell Industries has an offer to build a special product for the state highway patrol. | |||||
| The contract will cover a period of | 10 | years. The projected cash flows associated with | |||
| the contract are given below: | |||||
| Required: Complete an analysis to calculate the |
|||||
| Company Required |
11% | ||||
| Cost of new equipment | 325,000 | ||||
| Working Capital needed | 150,000 | ||||
| Net annual cash receipts | 80,000 | ||||
| Salvage Value at end | 75,000 | ||||
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