Problem 12-17 (Algo) Net present value and internal rate of return methods [LO12-4] The Hudson Corporation makes an investment of $37,120 that provides the following cash flow: Year 1 2 3 Cash Flow $ 18,000 18,000 12,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. What is the net present value at a discount rate of 10 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Net present value b. What is the internal rate of return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % c. Would you make the same decision under both parts a and b? Yes ○ No
Problem 12-17 (Algo) Net present value and internal rate of return methods [LO12-4] The Hudson Corporation makes an investment of $37,120 that provides the following cash flow: Year 1 2 3 Cash Flow $ 18,000 18,000 12,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. What is the net present value at a discount rate of 10 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Net present value b. What is the internal rate of return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % c. Would you make the same decision under both parts a and b? Yes ○ No
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
![Problem 12-17 (Algo) Net present value and internal rate of return
methods [LO12-4]
The Hudson Corporation makes an investment of $37,120 that provides the following
cash flow:
Year
1
2
3
Cash Flow
$ 18,000
18,000
12,000
Use Appendix B and Appendix D for an approximate answer but calculate your final
answer using the formula and financial calculator methods.
a. What is the net present value at a discount rate of 10 percent?
Note: Do not round intermediate calculations and round your answer to 2
decimal places.
Net present value
b. What is the internal rate of return?
Note: Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.
Internal rate of return
%
c. Would you make the same decision under both parts a and b?
Yes
○ No](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe23feda9-6680-4714-bad5-eb3bad054451%2F31f74fa2-a3a0-4dc7-beb0-e541666f5a5b%2Fc3x7mj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 12-17 (Algo) Net present value and internal rate of return
methods [LO12-4]
The Hudson Corporation makes an investment of $37,120 that provides the following
cash flow:
Year
1
2
3
Cash Flow
$ 18,000
18,000
12,000
Use Appendix B and Appendix D for an approximate answer but calculate your final
answer using the formula and financial calculator methods.
a. What is the net present value at a discount rate of 10 percent?
Note: Do not round intermediate calculations and round your answer to 2
decimal places.
Net present value
b. What is the internal rate of return?
Note: Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.
Internal rate of return
%
c. Would you make the same decision under both parts a and b?
Yes
○ No
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education