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
17)For the following stream of
| Year | 0 | 1 | 2 | 3 | 4 | 5 |
| Free Cash Flows | -45,452 | 10,005 | 14,921 | 12,537 | 10,452 | 21,455 |
Group of answer choices
$2,467.03
$2,192.92
$2,743.22
$2,911.41
Expert Solution
Step 1
Net Present Value:
- It is the difference between the cash outflow and the discounted cash inflows. The usual rule of NPV is if the project has a positive NPV, the project should be accepted. If the NPV of the project is negative, the project should be rejected.
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