Question Content Area Falkland, Inc., is considering the purchase of a patent that has a cost of $51,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 10%. The patent is expected to generate the following amounts of annual income and cash flows: Year 1 Year 2 Year 3 Year 4 Net income $5,100 $6,500 $6,300 $3,000 Operating cash flows 16,900 18,200 18,450 14,800(Click here to see present value and future value tables) A. What is the NPV of the investment? Round your present value factor to three decimal places and final answer to the nearest dollar. $fill in the blank 1 B. What happens if the required rate of return increases? If the required rate of return increases, . Please round off please?
Question Content Area Falkland, Inc., is considering the purchase of a patent that has a cost of $51,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 10%. The patent is expected to generate the following amounts of annual income and cash flows: Year 1 Year 2 Year 3 Year 4 Net income $5,100 $6,500 $6,300 $3,000 Operating cash flows 16,900 18,200 18,450 14,800(Click here to see present value and future value tables) A. What is the NPV of the investment? Round your present value factor to three decimal places and final answer to the nearest dollar. $fill in the blank 1 B. What happens if the required rate of return increases? If the required rate of return increases, . Please round off please?
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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Falkland, Inc., is considering the purchase of a patent that has a cost of $51,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 10%. The patent is expected to generate the following amounts of annual income and cash flows:
(Click here to seeYear 1 Year 2 Year 3 Year 4 Net income $5,100 $6,500 $6,300 $3,000 Operating cash flows 16,900 18,200 18,450 14,800 present value andfuture value tables)A. What is the NPV of the investment? Round your present value factor to three decimal places and final answer to the nearest dollar.
$fill in the blank 1
B. What happens if the required
rate of return increases?If the required rate of return increases,
.
Please round off please?
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