A factory costs $460,000. You forecast that it will produce cash inflows of $150,000 in year 1, $210,000 in year 2, and $360,000 in year 3. The discount rate is 12%. a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Is the factory a good investment?
A factory costs $460,000. You forecast that it will produce cash inflows of $150,000 in year 1, $210,000 in year 2, and $360,000 in year 3. The discount rate is 12%. a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Is the factory a good investment?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 4EA: Assume a company is going to make an investment of $450,000 in a machine and the following are the...
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a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. Is the factory a good investment?
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