A risky $420,000 investment is expected to generate the following cash flows: Year 1 2 3 4 $ 102,700 $ 163,030 $ 160,824 $ 135,200 If the firm’s cost of capital is 12 percent, should the investment be made?. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar. NPV: $ Should The investment be made?
A risky $420,000 investment is expected to generate the following cash flows:
Year 1 2 3 4
$ 102,700 $ 163,030 $ 160,824 $ 135,200
If the firm’s cost of capital is 12 percent, should the investment be made?. Use a minus sign to enter a negative value, if any. Round your answer to the nearest dollar.
NPV: $
Should The investment be made?
An alternative use for the $420,000 is a four-year U.S. Treasury bond that pays $25,200 annually and repays the $420,000 at maturity. Management believes that the
NPV: $
Should The investment be made?
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Net Present Value (NPV) is a financial metric that measures the difference between the present value of cash inflows and the present value of cash outflows of a project or investment. The NPV formula is used to determine the profitability of an investment by comparing the present value of future cash flows to the initial investment. NPV is a widely used financial metric in capital budgeting and investment analysis. It is used to evaluate the profitability of a project and to compare different investment alternatives by considering the time value of money.
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