Author Question: A company needs to spend $15 000 for each of the next three years. Net returns beginning in Year 4 ... (Read 400 times)

Beheh · **on:** Jun 7, 2019

Question 1

A company buys equipment for $15 000 today and has annual net cash inflows of $6000 for 3 years. The discount rate is 12% compounded annually. What is the Net Present Value (NPV)?
◦ $552.90
◦ -$525.90
◦ $992.50
◦ $652.90
◦ -$652.90

Question 2

A company needs to spend $15 000 for each of the next three years. Net returns beginning in Year 4 are estimated at $2500 per year for ten years. The required rate of return is 9.75% compounded annually. The NPV is?
◦ $27 521.41
◦ -$27 721.41
◦ -$27 521.41
◦ -$25 721.41
◦ $25 217.41

Ahernandez18 · **Reply #1 on:** Jun 7, 2019

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