A B D E F 1 CAPBUD 3 Capital Budgeting Data Section 6. 7 Cost of investment (initial outlay) 8 Estimated life of investment 9 Estimated salvage value 10 Estimated annual net cash inflow 11 Required rate of retum $500,000 10 years $25,000 $110,000 20.00% 12 Answer Section 13 14 15 Payback period 16 Accounting (average) rate of retum 17 Net present value 18 Internal rate of return FORMULA1 years FORMULA2 FORMULA3 FORMULA4 19 20 21 22 23 Scratch Pad 24 Cash flow table needed for NPV & IRR calculations NPV 25 26 IRR 27 Annual Salvage Combined 28 Year Cash Flow Value Flows 29 -500000 30 1 110000 110000 31 2 110000 110000 110000 110000 32 3 110000 33 4 110000 34 5 110000 110000 35 6 110000 110000 36 7 110000 110000 37 8 110000 110000 38 110000 110000 39 10 110000 25000 135000
A B D E F 1 CAPBUD 3 Capital Budgeting Data Section 6. 7 Cost of investment (initial outlay) 8 Estimated life of investment 9 Estimated salvage value 10 Estimated annual net cash inflow 11 Required rate of retum $500,000 10 years $25,000 $110,000 20.00% 12 Answer Section 13 14 15 Payback period 16 Accounting (average) rate of retum 17 Net present value 18 Internal rate of return FORMULA1 years FORMULA2 FORMULA3 FORMULA4 19 20 21 22 23 Scratch Pad 24 Cash flow table needed for NPV & IRR calculations NPV 25 26 IRR 27 Annual Salvage Combined 28 Year Cash Flow Value Flows 29 -500000 30 1 110000 110000 31 2 110000 110000 110000 110000 32 3 110000 33 4 110000 34 5 110000 110000 35 6 110000 110000 36 7 110000 110000 37 8 110000 110000 38 110000 110000 39 10 110000 25000 135000
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
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