(a)
Cash flow is the monetary consideration (return or income) received by the business for its long-term capital investment.
Net present value method is the method which is used to compare the initial
To determine: The net present value based on the original estimates.
(b)
Net present value method:
Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.
To determine: The net present value based on the revised estimates.
(c)
Net present value method:
Net present value method is the method which is used to compare the initial cash outflow of investment with the present value of its cash inflows. In the net present value, the interest rate is desired by the business based on the net income from the investment, and it is also called as the discounted cash flow method.
To determine: The net present value based on the original estimates with 10% of discount rate.
(d)
The
The internal rate of return method is one of the capital investment methods which determine the rate of return wherein the net present value of all the cash flows (both positive and negative) from an investment is zero. This method also called as the time-adjusted rate of return method, and it used to evaluate the different proposal’s expected rate of return.
To determine: The internal rate of return for the given proposa
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Chapter 12 Solutions
Managerial Accounting: Tools for Business Decision Making
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Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENT