5.10 Consider the following sets of investment projects, all of which have a three-year investment life: Period Project's Cash Flow (n) A В C D -$12,500 -11,000 12,500 - 13,000 1 5,400 -3,000 -7,000 5,500 14,400 21,000 -2,000 5,500 3 7,200 13,000 4,000 8,500 (a) Compute the net present worth of each project at i = 15%. (b) Compute the net future worth of each project at i = 15%. Which project or projects are acceptable?
5.10 Consider the following sets of investment projects, all of which have a three-year investment life: Period Project's Cash Flow (n) A В C D -$12,500 -11,000 12,500 - 13,000 1 5,400 -3,000 -7,000 5,500 14,400 21,000 -2,000 5,500 3 7,200 13,000 4,000 8,500 (a) Compute the net present worth of each project at i = 15%. (b) Compute the net future worth of each project at i = 15%. Which project or projects are acceptable?
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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Transcribed Image Text:5.10 Consider the following sets of investment projects, all of which have a three-year
investment life:
Period
Project's Cash Flow
(n)
A
B
C
D
- $12,500
-11,000
12,500
- 13,000
1
5,400
-3,000
-7,000
5,500
2
14,400
21,000
-2,000
5,500
3
7,200
13,000
4,000
8,500
(a) Compute the net present worth of each project at i = 15%.
(b) Compute the net future worth of each project at i
Which project or projects are acceptable?
15%.
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