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YEAR CASH FLOW FROM INVESTMENT 1 INVESTMENT 2 INVESTMENT 3 CASH FLOW CASH FLOW FROM FROM 1. $ 1,000 $ 7,000 $ 10,000 2 1,000 6,000 5,000 3 3,000 5,000 3,000 4 15,000 4,000 2,000 3,000 4,000 1,000 1,000 4,000 1,000 7 4,000 1,000 8 1,000 2,000 1,000 n6

YEAR CASH FLOW FROM INVESTMENT 1 INVESTMENT 2 INVESTMENT 3 CASH FLOW CASH FLOW FROM FROM 1. $ 1,000 $ 7,000 $ 10,000 2 1,000 6,000 5,000 3 3,000 5,000 3,000 4 15,000 4,000 2,000 3,000 4,000 1,000 1,000 4,000 1,000 7 4,000 1,000 8 1,000 2,000 1,000 n6

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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Question
Evaluate the following capital investments according
to net present value. Each alternative requires an initia l investment
of $20,000. Assume a I 0% cost of capital. Which is the preferred
investment?
YEAR CASH FLOW FROM INVESTMENT 1 INVESTMENT 2 INVESTMENT 3 CASH FLOW CASH FLOW FROM FROM 1. $ 1,000 $ 7,000 $ 10,000 2 1,000 6,000 5,000 3 3,000 5,000 3,000 4 15,000 4,000 2,000 3,000 4,000 1,000 1,000 4,000 1,000 7 4,000 1,000 8 1,000 2,000 1,000 n6
Transcribed Image Text:YEAR CASH FLOW FROM INVESTMENT 1 INVESTMENT 2 INVESTMENT 3 CASH FLOW CASH FLOW FROM FROM 1. $ 1,000 $ 7,000 $ 10,000 2 1,000 6,000 5,000 3 3,000 5,000 3,000 4 15,000 4,000 2,000 3,000 4,000 1,000 1,000 4,000 1,000 7 4,000 1,000 8 1,000 2,000 1,000 n6
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