Lanham Incorporated recently invested in a project with a 3-year life span. The net present value was $9,000 and annual cash inflows were $21,000 for year 1; $24,000 for year 2; and $27,000 for year 3. The initial investment for the project, assuming a 15% required rate of return, was Year Present Value of 1 at 15% PV of an Annuity of 1 at 15% 1 .870 .870 2 .756 1.626 3 .658 2.283
Lanham Incorporated recently invested in a project with a 3-year life span. The net present value was $9,000 and annual cash inflows were $21,000 for year 1; $24,000 for year 2; and $27,000 for year 3. The initial investment for the project, assuming a 15% required rate of return, was Year Present Value of 1 at 15% PV of an Annuity of 1 at 15% 1 .870 .870 2 .756 1.626 3 .658 2.283
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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Lanham Incorporated recently invested in a project with a 3-year life span. The
| Year | Present Value of 1 at 15% |
PV of an of 1 at 15% |
|---|---|---|
| 1 | .870 | .870 |
| 2 | .756 | 1.626 |
| 3 | .658 | 2.283 |
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