A company is considering a small project that requires an immediate investment of £120,000. Net income from the project is expected to be £20,000 per annum received continuously over the next twelve years. (a)Calculate the net present value of the investment at an effective rate of interest of 7% per annum. (b)Calculate the discounted payback period for the project at an effective rate of interest of 7% per annum.
A company is considering a small project that requires an immediate investment of £120,000. Net income from the project is expected to be £20,000 per annum received continuously over the next twelve years. (a)Calculate the net present value of the investment at an effective rate of interest of 7% per annum. (b)Calculate the discounted payback period for the project at an effective rate of interest of 7% per annum.
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 small project that requires an immediate investment of £120,000. Net income from the project is expected to be £20,000 per annum received continuously over the next twelve years.
(a)Calculate the
(b)Calculate the discounted payback period for the project at an effective rate of interest of 7% per annum.
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