Morison Cars Inc. has a new project with a cost of $480,000 and annual cash flows of $154,000 for 5 years. The cost of capital for the project is 15%. Calculate (i) net present value, (ii) discounted payback period, (iii) profitability index. Make a decision in each case and at the end (assume a benchmark period of 3.61 years).
Morison Cars Inc. has a new project with a cost of $480,000 and annual cash flows of $154,000 for 5 years. The cost of capital for the project is 15%. Calculate (i) net present value, (ii) discounted payback period, (iii) profitability index. Make a decision in each case and at the end (assume a benchmark period of 3.61 years).
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
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6a) Morison Cars Inc. has a new project with a cost of $480,000 and annual cash flows of $154,000 for 5 years. The cost of capital for the project is 15%. Calculate (i)
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