The Horizon Company will invest $54,000 in a temporary project that will generate the following cash inflows for the next three years. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 2 3 Cash Flow $ 19,000 33,000 24,000 The firm will also be required to spend $12,000 to close down the project at the end of the three years. a. Compute the net present value if the cost of capital is 9 percent. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. Net present value
The Horizon Company will invest $54,000 in a temporary project that will generate the following cash inflows for the next three years. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Year 2 3 Cash Flow $ 19,000 33,000 24,000 The firm will also be required to spend $12,000 to close down the project at the end of the three years. a. Compute the net present value if the cost of capital is 9 percent. Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places. Net present value
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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Transcribed Image Text:The Horizon Company will invest $54,000 in a temporary project that will generate the following cash inflows for the next three years.
Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.
Year
1
2
3
Cash Flow
$ 19,000
33,000
24,000
The firm will also be required to spend $12,000 to close down the project at the end of the three years.
a. Compute the net present value if the cost of capital is 9 percent.
Note: Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to
2 decimal places.
Net present value
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