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A company is considering a $150,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. nitial investment Required rate of return $150,000 10% Required: a) Compute the net present value of this investment. Present Value of Net

A company is considering a $150,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. nitial investment Required rate of return $150,000 10% Required: a) Compute the net present value of this investment. Present Value of Net

Essentials Of Investments
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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I need the formulas for excel using the PV function

A company is considering a $150,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. Initial investment Required rate of return Required: (a) Compute the net present value of this investment. Period 1 2 3 st 4 5 Totals Initial investment Net present value $150,000 10% Net Cash Flows Verify the value of cell C18 using the NPV function (b) Should the machinery be purchased? $10,000 25,000 50,000 37,500 100,000 $222,500 Present Value of Net Cash Flows
Transcribed Image Text:A company is considering a $150,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. Initial investment Required rate of return Required: (a) Compute the net present value of this investment. Period 1 2 3 st 4 5 Totals Initial investment Net present value $150,000 10% Net Cash Flows Verify the value of cell C18 using the NPV function (b) Should the machinery be purchased? $10,000 25,000 50,000 37,500 100,000 $222,500 Present Value of Net Cash Flows
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