Correct Answer: $940,346 Jennifer So that is the present-day value of expected cash flow 3 years from now? Nick Morales Yes, Monster expects a 11.4% annual return on their investments, so we must discount the future cash flows by 11.4% for every year in the future they occur. What is the present value of all future cash Enter a response then click Submit below. $ Submit 3 Monster Beverage is considering purchasing a new canning machine. This machine costs $3,500,000 up front. Required return 11.4% Year Cash Flow Discounted Cash Flow 0 $-3,500,000 $-3,500,000 1 $1,000,000 $897,666 2 $1,200,000 $966,965 3 $1,300,000 $940,346 4 $900,000 $584,389 5 $1,000,000 $582,873
Correct Answer: $940,346 Jennifer So that is the present-day value of expected cash flow 3 years from now? Nick Morales Yes, Monster expects a 11.4% annual return on their investments, so we must discount the future cash flows by 11.4% for every year in the future they occur. What is the present value of all future cash Enter a response then click Submit below. $ Submit 3 Monster Beverage is considering purchasing a new canning machine. This machine costs $3,500,000 up front. Required return 11.4% Year Cash Flow Discounted Cash Flow 0 $-3,500,000 $-3,500,000 1 $1,000,000 $897,666 2 $1,200,000 $966,965 3 $1,300,000 $940,346 4 $900,000 $584,389 5 $1,000,000 $582,873
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
Related questions
Question
am. 101.
Transcribed Image Text:Correct Answer:
$940,346
Jennifer
So that is the present-day value of
expected cash flow 3 years from now?
Nick Morales
Yes, Monster expects a 11.4% annual
return on their investments, so we must
discount the future cash flows by 11.4% for
every year in the future they occur.
What is the present value of all future cash
Enter a response then click Submit below.
$
Submit
3
Monster Beverage is considering purchasing a new canning machine.
This machine costs $3,500,000 up front.
Required return 11.4%
Year
Cash Flow
Discounted Cash Flow
0
$-3,500,000
$-3,500,000
1
$1,000,000
$897,666
2
$1,200,000
$966,965
3
$1,300,000
$940,346
4
$900,000
$584,389
5
$1,000,000
$582,873
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