33. An investment that costs $80,000 will provide a return of $20,000 per year for each of the next five years. Ignoring taxes, what is the net present value of the investment if the required rate of return in 14 percent? A. ($20,000) B. $21,552 C. ($11,338) D. $68,662
33. An investment that costs $80,000 will provide a return of $20,000 per year for each of the next five years. Ignoring taxes, what is the net present value of the investment if the required rate of return in 14 percent? A. ($20,000) B. $21,552 C. ($11,338) D. $68,662
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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(Capital budgeting)
33. An investment that costs $80,000 will provide a return of $20,000 per year for each of the next five years. Ignoring taxes, what is the
A. ($20,000)
B. $21,552
C. ($11,338)
D. $68,662
34. A proposed project will cost $600,000 and will provide returns of $150,000 in Year 1, $300,000 in Year 2, and $500,000 in Year 3. There will not be any cash flows associated with the project after Year 3. If taxes are ignored, and the company’s hurdle rate is 15%, what is the net present value of the project?
A. $86,020
B. $23,013
C. $66,373
D. $50,000
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