Apache Junction Company is evaluating a capital expenditure proposal that requires an initial investment of $44,190, has predicted cash inflows of $9,000 per year for 13 years, and has no salvage value. (a) Using a discount rate of 16 percent, determine the net present value of the investment proposal. (Round to the nearest
Apache Junction Company is evaluating a capital expenditure proposal that requires an initial investment of $44,190, has predicted cash inflows of $9,000 per year for 13 years, and has no salvage value. (a) Using a discount rate of 16 percent, determine the net present value of the investment proposal. (Round to the nearest
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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NPV and IRR:
Equal Annual Net
Apache Junction Company is evaluating a capital expenditure proposal that requires an initial investment of $44,190, has predicted cash inflows of $9,000 per year for 13 years, and has no salvage value.
(a) Using a discount rate of 16 percent, determine the
$Answer
(b) Determine the proposal's internal rate of return.
Answer %
(c) What discount rate would produce a net present value of zero?
Answer %
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