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A3-2 A project has costs and incomes as shown on the diagram in thousands of dollars. C = Capital, OC = Operating Cost, and L= salvage or liqui- dation value of the assets upon termination of the project. I=100 I=250 I=375 I=500 I=500 I=400 C=100 C-500 OC=100 OC-125 OC=150 OC-150 OC=200 0 4 5 6 The investor's minimum rate of return is 15%. Calculate the before- tax cash flow (BTCF) and then determine the ROR, NPV, PVR, and Growth ROR for the project using the 6-year evaluation life. L=100

A3-2 A project has costs and incomes as shown on the diagram in thousands of dollars. C = Capital, OC = Operating Cost, and L= salvage or liqui- dation value of the assets upon termination of the project. I=100 I=250 I=375 I=500 I=500 I=400 C=100 C-500 OC=100 OC-125 OC=150 OC-150 OC=200 0 4 5 6 The investor's minimum rate of return is 15%. Calculate the before- tax cash flow (BTCF) and then determine the ROR, NPV, PVR, and Growth ROR for the project using the 6-year evaluation life. L=100

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
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A3-2 A project has costs and incomes as shown on the diagram in thousands of dollars. C = Capital, OC = Operating Cost, and L= salvage or liqui- dation value of the assets upon termination of the project. I=100 I=250 I=375 I=500 I=500 I=400 C=100 C=500 OC=100 OC=125 OC=150 OC-150 OC=200 0 1 2 3 4 5 6 The investor's minimum rate of return is 15%. Calculate the before- tax cash flow (BTCF) and then determine the ROR, NPV, PVR, and Growth ROR for the project using the 6-year evaluation life. L=100
Transcribed Image Text:A3-2 A project has costs and incomes as shown on the diagram in thousands of dollars. C = Capital, OC = Operating Cost, and L= salvage or liqui- dation value of the assets upon termination of the project. I=100 I=250 I=375 I=500 I=500 I=400 C=100 C=500 OC=100 OC=125 OC=150 OC-150 OC=200 0 1 2 3 4 5 6 The investor's minimum rate of return is 15%. Calculate the before- tax cash flow (BTCF) and then determine the ROR, NPV, PVR, and Growth ROR for the project using the 6-year evaluation life. L=100
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