Beam Cable Company is considering investing $450,000 in telecommunications equipment that has an estimated life of four yearswith no residual value. The cash inflows are as shown below:Year 1234$120,000235,000140,00098,000The present value of $1:10%0.90911%0.9010.8120.751 0.73112 0.8263OA. between 9% and 10%OB. between 12% and 13%OC. less than 10%OD. more than 13%12%0.8930.7970.71213%0.8850.7830.69314%0.8770.7690.675(...

Year Cash flows 0 $ -4,50,000.00 1 $ 1,20,000.00 2 $…

Beam Cable Company is considering investing $450,000 in telecommunications equipment that has an estimated life of four years with no residual value. The cash inflows are as shown below: Year 1 2 3 4 The present value of $1: 10% A 1 $120,000 235,000 140,000 98,000 23 11% 0.909 0.901 0.826 0.812 0.751 0.731 between 9% and 10% 12% 0.893 0.797 0.712 13% 0.885 0.783 0.693 14% 0.877 0.769 0.675

Beam Cable Company is considering investing $450,000 in telecommunications equipment that has an estimated life of four years with no residual value. The cash inflows are as shown below: Year 1 2 3 4 The present value of $1: 10% A 1 $120,000 235,000 140,000 98,000 23 11% 0.909 0.901 0.826 0.812 0.751 0.731 between 9% and 10% 12% 0.893 0.797 0.712 13% 0.885 0.783 0.693 14% 0.877 0.769 0.675

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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NOVA Company is considering a long-term investment project called STUDY. STUDY will require an investment of $125,190. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $79,000, and annual cash outflows would increase by $40,000. Compute the cash payback period. O 3.21 years O 1.23 years O 1.58 years O 4 years
You are asked to analyze the following scenario and determine its value. What it the most you would be willing to invest in this project if your required rate of return is 8%. (Assume cash flows occur at the end of each year). Cash flows Year 1-3: $250,000,000 Year 4: ($700,000,000) Year 5-10: $145,000,000 O $622,456,761 $817,651,378 $454,789,469 $658,458,045
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