None CullumberCompanyisconsidering an investment that willreturn a lump sum of $942,800, 3years from now. What amountshould Cullumber Company payfor this investment to earn a 12%return?

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...

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A company is considering a long term investment that requires a $45.000 investment today, andthen in 4 years promises a payout of $55.500 with prob. 0.4 and a payout of $66.000 with prob0.6. If the opportunity cost of capital for the compay is 8%, what is the expected net presentvalue?a) 425b) 433c) 441d) 449
If you invest $10,000 now into a project that will yield net revenues of $1327 at the end of each year for 12 years, what is the internal rate of return (IRR) of your investment? O a 18% Оь. 10% Ос. 16% Od. 8% O e. 15%
Given the initial investment in a factory processing equipment as Ghc500,037. Let the opportunity cost of capital for the industry be 10% p.a. Assuming that the equipment is capable of generating an after-tax returns of Ghc115,000 for the first 5 years and Ghc65000 for the 6th year and Ghc53400 for the 7th year. a. Find the Net Present Value (NPV) b. Determine the Internal Rate of Return c. Identify three ways in which the Net Present value is superior to the Internal Rate of
Given the initial investment in a factory processing equipment as Ghc500,037. Let the opportunity cost of capital for the industry be 10% p.a. Assuming that the equipment is capable of generating an after-tax returns of Ghc115,000 for the first 5 years and Ghc65000 for the 6 year and Ghe53400 for the 7th year. a. Find the Net Present Value (NPV) b. Detemine the Internal Rate of Return c. Identify three ways in which the Net Present value is superior to the Internal Rate of return as investment criteria
. If you invest $10,000 now into a project that will yield net revenues of $1.327 at the end of each year for 12 years, what is the internal rate of return (IRR) of your investment? O a 18% Ob 10% O. 16% Od. 8% Oe 15%
You have an opportunity to invest $102,000 now in return for $79,700 in one year and $30,400 in two yoars If your cost of capital is 9.5%, what is the NPV of this investment? The NPV will be S (Round to the nearest cent)
Given the initial investment in a factory processing equipment as Ghc500,037. Let the opportunity cost of capital for the industry be 10% p.a. Assuming that the equipment is capable of generating an after-tax returns of Ghc115,000 for the first 5 years and Ghc65000 for the 6th year and Ghc53400 for the 7th year. Find the Net Present Value (NPV) Determine the Internal Rate of Return Identify three ways in which the Net Present value is superior to the Internal Rate of return as investment criteria
What is the internal rate of return (IRR) of an investment that requires an initial investmen of $11,000 today and pays $15,400 in one year's time?
If An investment costs $23,958 and will generate cash flow of $6,000 annually for five years. The firm's cost of capital is 10 percent? a. What is the investment's internal rate return? Based on the net present rate return, should the firm makeinvestment? b.What is the investment's net present value? Based on the net present value, should the firm make the investment?
Suppose a firm will invest $500 today, $600 a year from now, $700 two years from now, $800 three years from now, and $900 four years from now. What will the future value of the project five years from now assuming the interest rate of 12%? O $3,939.08 $4,303.79 $5,398.68 $4,820.25

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Cullumber Company is considering an investment that will return a lump sum of $942,800, 3 years from now. What amount should Cullumber Company pay for this investment to earn a 12% return?