Rachel Foundation, Inc., a tax-exempt organization duly registered with the Securities and Exchange Commission, is planning to invest P280,000 in a project at the beginning of 2022. The estimated annual cash savings from this project is P90,000. The project will be depreciated over its five-year life on a straight-line basis. The foundation’s desired rate of return on investments of this type is 10%. 1. Using the built-in Excel formula, the present value of cash savings is: (Round off to the nearest whole number) 2. Based on your answer above, the investment project’s net present value is? 3. The investment project’s payback period is?
Rachel Foundation, Inc., a tax-exempt organization duly registered with the Securities and Exchange Commission, is planning to invest P280,000 in a project at the beginning of 2022. The estimated annual cash savings from this project is P90,000. The project will be depreciated over its five-year life on a straight-line basis. The foundation’s desired rate of return on investments of this type is 10%. 1. Using the built-in Excel formula, the present value of cash savings is: (Round off to the nearest whole number) 2. Based on your answer above, the investment project’s net present value is? 3. The investment project’s payback period is?
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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Rachel Foundation, Inc., a tax-exempt organization duly registered with the Securities and Exchange Commission, is planning to invest P280,000 in a project at the beginning of 2022. The estimated annual cash savings from this project is P90,000. The project will be depreciated over its five-year life on a straight-line basis. The foundation’s desired
1. Using the built-in Excel formula, the
2. Based on your answer above, the investment project’s
3. The investment project’s payback period is?
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