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Essentials Of Investments
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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A company has to make a decision about expanding its production facilities Research ndicates that the desired expansion would require an immedate outlay of. $20,000 and an outiay of a further $80,000 in 3 yoars. The net cash retums are shown below Find the not present value of the project According to the net present value criterion, should the expansion project be undertaken if the required rate of return s 7%? Year 1 to Year 5 Year 6 to Year 9 $15.000 per year $10.000 per year The net present value of the expansion project is S (Round the final answer to the nearest dollar as needed Round all intermediate values to six decimal places as needed)
Transcribed Image Text:A company has to make a decision about expanding its production facilities Research ndicates that the desired expansion would require an immedate outlay of. $20,000 and an outiay of a further $80,000 in 3 yoars. The net cash retums are shown below Find the not present value of the project According to the net present value criterion, should the expansion project be undertaken if the required rate of return s 7%? Year 1 to Year 5 Year 6 to Year 9 $15.000 per year $10.000 per year The net present value of the expansion project is S (Round the final answer to the nearest dollar as needed Round all intermediate values to six decimal places as needed)
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