Suppose you are considering a project has an initial cost of $600 that has an ongoing benefit of $ 250. Further, there is an ongoing cost that is equal to $90, which increases by 10% each year ( compounding). Assume the project lasts 6 years. If the appropriate discount rate is 6%. Calculate: a) the Net Present Value = $ Blank 1 b) the Benefit Cost Ratio Blank 2 c) should the project be accepted or rejected? Explain your answer using the information from part a) and b). Answer = Blank 3 (accept/reject) provide your answers to two decimal places. Do not include any commas (,) "$" or "%" in your answers. Ensure you show all your working in your spreadsheet. (best show with excel)
Suppose you are considering a project has an initial cost of $600 that has an ongoing benefit of $ 250. Further, there is an ongoing cost that is equal to $90, which increases by 10% each year ( compounding). Assume the project lasts 6 years. If the appropriate discount rate is 6%. Calculate: a) the Net Present Value = $ Blank 1 b) the Benefit Cost Ratio Blank 2 c) should the project be accepted or rejected? Explain your answer using the information from part a) and b). Answer = Blank 3 (accept/reject) provide your answers to two decimal places. Do not include any commas (,) "$" or "%" in your answers. Ensure you show all your working in your spreadsheet. (best show with excel)
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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