Company has $200,000 to invest and wishes to evaluate the following three projects. Years A ($) B ($) C ($) 0 (80,000) (100,000) (60,000) 1 40,000 60,000 50,000 2 40,000 30,000 30,000 3 40,000 40,000 10,000 4 40,000 60,000 cost of capital 10% 10% 10% calculate Net Present Value (NPV). Profitability Index (PI). The internal rate of return (IRR) (hint: use 35%)
Company has $200,000 to invest and wishes to evaluate the following three projects. Years A ($) B ($) C ($) 0 (80,000) (100,000) (60,000) 1 40,000 60,000 50,000 2 40,000 30,000 30,000 3 40,000 40,000 10,000 4 40,000 60,000 cost of capital 10% 10% 10% calculate Net Present Value (NPV). Profitability Index (PI). The internal rate of return (IRR) (hint: use 35%)
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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Company has $200,000 to invest and wishes to evaluate the following three projects.
|
Years |
A ($) |
B ($) |
C ($) |
|
0 |
(80,000) |
(100,000) |
(60,000) |
|
1 |
40,000 |
60,000 |
50,000 |
|
2 |
40,000 |
30,000 |
30,000 |
|
3 |
40,000 |
40,000 |
10,000 |
|
4 |
40,000 |
60,000 |
|
|
cost of capital |
10% |
10% |
10% |
calculate
Profitability Index (PI).
The
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