A company is considering a project that will require an initial investment of 600 and additional investments of 100 and 50 at the end of years one and two, respectively. It is expected that revenue from this project will be 150 per year for five years, beginning one year from the initial investment. Assuming an annual effective rate of 15%, calculate the net present value of this project.
A company is considering a project that will require an initial investment of 600 and additional investments of 100 and 50 at the end of years one and two, respectively. It is expected that revenue from this project will be 150 per year for five years, beginning one year from the initial investment. Assuming an annual effective rate of 15%, calculate the net present value of this project.
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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A company is considering a project that will require an initial investment of 600 and additional
investments of 100 and 50 at the end of years one and two, respectively. It is expected that
revenue from this project will be 150 per year for five years, beginning one year from the initial
investment.
Assuming an annual effective rate of 15%, calculate the net present value of this project.
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