Fixed capital investment 320 000 € working capital 35 000 € scrap value 30 000 € for the project with 6 years of service life and net cash flow given in the table, a) Calculate average rate of return (relative to NNA) b) Calculate net payback period c) Calculate net present value (r = 0.17) d) Calculate the discount rate (r *) that makes the net present value zero. *NCF: Net Cash Flow Year 1 2 3 4 5 6 NCF (€) 120000 130000 150000 170000 155000 140000
Fixed capital investment 320 000 € working capital 35 000 € scrap value 30 000 € for the project with 6 years of service life and net cash flow given in the table, a) Calculate average rate of return (relative to NNA) b) Calculate net payback period c) Calculate net present value (r = 0.17) d) Calculate the discount rate (r *) that makes the net present value zero. *NCF: Net Cash Flow Year 1 2 3 4 5 6 NCF (€) 120000 130000 150000 170000 155000 140000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Fixed capital investment 320 000 €
a) Calculate average
b) Calculate net payback period
c) Calculate
d) Calculate the discount rate (r *) that makes the net present value zero.
*NCF: Net Cash Flow
Year |
1 |
2 |
3 |
4 |
5 |
6 |
NCF (€) |
120000 |
130000 |
150000 |
170000 |
155000 |
140000 |
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 5 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education