Required 1 Required 2 Required 3 Required 4 Determine the break-even time for this investment. Note: Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place. Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Break-even time= Net Cash Flows $ (245,000) Show Transcribed Text Present Value of Present Value of Net 1 at 10% Cash Flows per Year years Required 1 Required 2 Required 3 Required 4 Show Transcribed Text Determine the net present value for this investment. Net present value Required 1 Required 2 Required 3 Required 4 2 Should management invest in this project based on net present value? Should management invest in this project based on net present value? C Cumulative Present Value of Net Cash Flows
Required 1 Required 2 Required 3 Required 4 Determine the break-even time for this investment. Note: Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place. Year Initial investment Year 1 Year 2 Year 3 Year 4 Year 5 Break-even time= Net Cash Flows $ (245,000) Show Transcribed Text Present Value of Present Value of Net 1 at 10% Cash Flows per Year years Required 1 Required 2 Required 3 Required 4 Show Transcribed Text Determine the net present value for this investment. Net present value Required 1 Required 2 Required 3 Required 4 2 Should management invest in this project based on net present value? Should management invest in this project based on net present value? C Cumulative Present Value of Net Cash Flows
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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Question
Hh2.
Account

Transcribed Image Text:Required 1 Required 2 Required 3 Required 4
Year
Determine the break-even time for this investment.
Note: Enter cash outflows with a minus sign. Round your break-even time answer to 1 decimal place.
Initial investment
Year 1
Year 2
Year 3
Year 4
Year 5
Break-even time =
Net Cash Flows
S
(245,000)
Show Transcribed Text
Net present value
S
years
Required 1 Required 2 Required 3 Required 4
Show Transcribed Text
Present Value of Present Value of Net
1 at 10%
Cash Flows per Year
Determine the net present value for this investment.
Ć
Required 1 Required 2 Required 3 Required 4
Ĉ
S
Ć
Should management invest in this project based on net present value?
Should management invest in this project based on net present value?
Cumulative
Present Value of
Net Cash Flows

Transcribed Image Text:Salsa Company is considering an investment in technology to improve its operations. The Investment costs $245,000 and will yield
the following net cash flows. Management requires a 10% return on Investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1)
Note: Use appropriate factor(s) from the tables provided.
Year
1
In
5
Net cash Flow
$ 47,980
52,500
75,500
96,880
125,280
Required:
1. Determine the payback period for this Investment.
2. Determine the break-even time for this Investment.
3. Determine the net present value for this Investment.
4. Should management Invest in this project based on net present value?
Complete this question by entering your answers in the tabs below.
Required 1 Required 2 Required 3 Required 4
Determine the payback period for this investment.
Note: Enter cash outflows with a minus sign. Round your Payback Period answer to 1 decimal place.
Year
Initial investment
Year 1
Year 2
Year 3
Year 4
Year 5
Payback period =
Net Cash Flows
$
(245,000)
47,900
52,500
75,500
96,000
125,200
Cumulative Net Cash
Flows
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