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Question 2 Not complete Marked out of 25.00 Flag question NPV and IRR: Unequal Annual Net Cash Inflows Rocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows. Initial investment $(85,000) Operation Year 1 $30,500 Year 2 $60,000 Year 3 $31,000 $0 Salvage REQUIRED a. Determine the payback period. Note: Round your answer to two decimal places. Enter 1.251 as 1.25; enter 1.255 as 1.26. years b. Using a discount rate of 12%, determine the net present value of the investment proposal. Note: Round your answer to the nearest dollar. $ 12129 c. Determine the proposal's internal rate of return. Note: Round your answer to two decimal places. Enter 10.251% as 10.25%; enter 10.255 % as 10.26%. %

Question 2 Not complete Marked out of 25.00 Flag question NPV and IRR: Unequal Annual Net Cash Inflows Rocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows. Initial investment $(85,000) Operation Year 1 $30,500 Year 2 $60,000 Year 3 $31,000 $0 Salvage REQUIRED a. Determine the payback period. Note: Round your answer to two decimal places. Enter 1.251 as 1.25; enter 1.255 as 1.26. years b. Using a discount rate of 12%, determine the net present value of the investment proposal. Note: Round your answer to the nearest dollar. $ 12129 c. Determine the proposal's internal rate of return. Note: Round your answer to two decimal places. Enter 10.251% as 10.25%; enter 10.255 % as 10.26%. %

Corporate Fin Focused Approach
Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter7: Valuation Of Stocks And Corporations
Section: Chapter Questions
Problem 23SP
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Question 2 Not complete Marked out of 25.00 Flag question NPV and IRR: Unequal Annual Net Cash Inflows Rocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows. Initial investment $(85,000) Operation Year 1 $30,500 Year 2 $60,000 Year 3 $31,000 $0 Salvage REQUIRED a. Determine the payback period. Note: Round your answer to two decimal places. Enter 1.251 as 1.25; enter 1.255 as 1.26. years b. Using a discount rate of 12%, determine the net present value of the investment proposal. Note: Round your answer to the nearest dollar. $ 12129 c. Determine the proposal's internal rate of return. Note: Round your answer to two decimal places. Enter 10.251% as 10.25%; enter 10.255 % as 10.26%. %
Transcribed Image Text:Question 2 Not complete Marked out of 25.00 Flag question NPV and IRR: Unequal Annual Net Cash Inflows Rocky Road Company is evaluating a capital expenditure proposal that has the following predicted cash flows. Initial investment $(85,000) Operation Year 1 $30,500 Year 2 $60,000 Year 3 $31,000 $0 Salvage REQUIRED a. Determine the payback period. Note: Round your answer to two decimal places. Enter 1.251 as 1.25; enter 1.255 as 1.26. years b. Using a discount rate of 12%, determine the net present value of the investment proposal. Note: Round your answer to the nearest dollar. $ 12129 c. Determine the proposal's internal rate of return. Note: Round your answer to two decimal places. Enter 10.251% as 10.25%; enter 10.255 % as 10.26%. %
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