The Hudson Corporation makes an investment of $38,250 that provides the following cash flow: Cash Flow $ 19,000 19,000 13,000 Year 1 2 3 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculat methods. a. What is the net present value at a discount rate of 11 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Answer is complete but not entirely correct. Net present value S 4,354.79
The Hudson Corporation makes an investment of $38,250 that provides the following cash flow: Cash Flow $ 19,000 19,000 13,000 Year 1 2 3 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculat methods. a. What is the net present value at a discount rate of 11 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Answer is complete but not entirely correct. Net present value S 4,354.79
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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Transcribed Image Text:The Hudson Corporation makes an investment of $38,250 that provides the following cash flow:
Year
1
2
3
Cash Flow
$ 19,000
19,000
13,000
Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator
methods.
a. What is the net present value at a discount rate of 11 percent?
Note: Do not round intermediate calculations and round your answer to 2 decimal places.
Answer is complete but not entirely correct.
Net present value
S 4,354.79 X
b. What is the internal rate of return?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.
Answer is complete and correct.
16.98 %
Internal rate of return
c. Would you make the same decision under both parts a and b?
Yes
No
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