An investment has an installed cost of $527,630. The cash flows over the four-year life of the investment are projected to be $212,200, $243,800, $203,500 and $167,410, respectively. If the discount rate is 10%, at what discount rate is the NPV just equal to 0? (Input in percentage, keep 2 decimals. e.g. if you got 0.10231, input 10.23) Question 10 The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up". As a result, the cemetery project will provide a net cash inflow of $145,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 4% per year forever. The project requires an initial investment of $1,900,000. The company is somewhat unsure about the assumption of a growth rate of 4% in its cash flows. At what constant growth rate would the company just break even if it still required a return of 11% on investment? (Input in percentage, keep 2 decimals. e.g. if you got 0.10231, input 10.23)
An investment has an installed cost of $527,630. The cash flows over the four-year life of the investment are projected to be $212,200, $243,800, $203,500 and $167,410, respectively. If the discount rate is 10%, at what discount rate is the NPV just equal to 0? (Input in percentage, keep 2 decimals. e.g. if you got 0.10231, input 10.23) Question 10 The Yurdone Corporation wants to set up a private cemetery business. According to the CFO, Barry M. Deep, business is "looking up". As a result, the cemetery project will provide a net cash inflow of $145,000 for the firm during the first year, and the cash flows are projected to grow at a rate of 4% per year forever. The project requires an initial investment of $1,900,000. The company is somewhat unsure about the assumption of a growth rate of 4% in its cash flows. At what constant growth rate would the company just break even if it still required a return of 11% on investment? (Input in percentage, keep 2 decimals. e.g. if you got 0.10231, input 10.23)
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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Transcribed Image Text:An investment has an installed cost of $527,630. The cash flows over the four-year
life of the investment are projected to be $212,200, $243,800, $203,500 and
$167,410, respectively. If the discount rate is 10%, at what discount rate is the NPV
just equal to 0? (Input in percentage, keep 2 decimals. e.g. if you got 0.10231, input
10.23)
Question 10
The Yurdone Corporation wants to set up a private cemetery business. According to
the CFO, Barry M. Deep, business is "looking up". As a result, the cemetery project
will provide a net cash inflow of $145,000 for the firm during the first year, and the
cash flows are projected to grow at a rate of 4% per year forever. The project
requires an initial investment of $1,900,000.
The company is somewhat unsure about the assumption of a growth rate of 4% in
its cash flows. At what constant growth rate would the company just break even if it
still required a return of 11% on investment? (Input in percentage, keep 2 decimals.
e.g. if you got 0.10231, input 10.23)
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