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What NPV does the previous calculation yield? $

What NPV does the previous calculation yield? $

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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The company has a project with a 5-year life that requires an initial investment of $220,000, and is expected to yield annual cash flows of $62,500. What is the net present value of the project if the required rate of return is set at 8%? Calculation Steps Present Value of an Annuity of $1 at Compound Interest. ($ 62,500 ✔ = Net Present Value X Note: Round your answer to the nearest whole dollar. What NPV does the previous calculation yield? $ 4,960 X ) - 220,000 ✓ 0 X
Transcribed Image Text:The company has a project with a 5-year life that requires an initial investment of $220,000, and is expected to yield annual cash flows of $62,500. What is the net present value of the project if the required rate of return is set at 8%? Calculation Steps Present Value of an Annuity of $1 at Compound Interest. ($ 62,500 ✔ = Net Present Value X Note: Round your answer to the nearest whole dollar. What NPV does the previous calculation yield? $ 4,960 X ) - 220,000 ✓ 0 X
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