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Author Question: Net present value is considered a sophisticated capital budgeting technique since it gives explicit ... (Read 22 times)

ghost!

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Net present value is considered a sophisticated capital budgeting technique since it gives explicit consideration to the time value of money.
 
  Indicate whether the statement is true or false

Question 2

Ten years ago, Tom purchased a painting for 300. The painting is now worth 1,020. Tom could have deposited 300 in a savings account paying 12 percent interest compounded annually.
 
  Which of these two options would have provided Tom with a higher return?



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zoeyesther

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Answer to Question 1

TRUE

Answer to Question 2

Using financial calculator: PV =- 300, FV = 1,020, n = 10, PMT =0, CPT I: 13
Painting has a higher return (13 percent) in comparison to the 12 percent rate of return from the savings account.




ghost!

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Reply 2 on: Jul 10, 2018
Gracias!


zacnyjessica

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Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

 

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