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ne time value of money tables in Appen ate the net present value for the equipr y index to the nearest two decimal place - the PI, should the project be accepted

ne time value of money tables in Appen ate the net present value for the equipr y index to the nearest two decimal place - the PI, should the project be accepted

Essentials Of Investments
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
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LARK Company purchased equipment in 2020 costing $160,000. LARK expected cash inflows of $42,000 for the next four years and $12,000 salvage at the end of the fourth year. The minimum acceptable rate of return (or the discount rate) was 8%. Use the time value of money tables in Appendix A of your textbook. For blank one, calculate the net present value for the equipment. For blank two, calculate the profitability index to the nearest two decimal places. For blank three, using either the NPV or the PI, should the project be accepted? Blank # 1 Blank # 2 A/ Blank # 3
Transcribed Image Text:LARK Company purchased equipment in 2020 costing $160,000. LARK expected cash inflows of $42,000 for the next four years and $12,000 salvage at the end of the fourth year. The minimum acceptable rate of return (or the discount rate) was 8%. Use the time value of money tables in Appendix A of your textbook. For blank one, calculate the net present value for the equipment. For blank two, calculate the profitability index to the nearest two decimal places. For blank three, using either the NPV or the PI, should the project be accepted? Blank # 1 Blank # 2 A/ Blank # 3
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