A new computer system will require an initial outlay of $15,650, but it will increase the firm s cash flows by $3,400 a year for each of the next 7 years. Calculate the NPV and decide if the system is worth installing if the required rate of return is 10%.
a. Calculate the NPV and decide if the system is worth installing if the required rate of return is 15%.
b. How high can the discount rate be before you would reject the project?
Suppose your retirement goal is to accumulate $400 in 2.5 years. How much do you need to deposit in the bank today to meet your goal if the bank offers an interest rate of 5.65%?
a. $321
b. $336
c. $482
d. $293
e. $349
A machine costs $80,000 to purchase and generates an annual revenue of $26,000 with an $8,500 annual cost. Assume that your time value of money (MARR) is 7%, and this machine lasts 6 years.
What is the Net Present Value?
You are to receive $50,000, 10.25 years from now. If the quoted annual rate (APR) is 9.25%, what is the present value of that amount assuming continuous compounding?
a. $19,373.34
b. $16,134.72
c. $20,922.95
d. $25,988.50
e. $15,908.75
The projected net cash flows for an investment are (in Pound ‘000):
Y0: -950
Y1: 130
Y2: 200
Y3: 330
Y4: 270
Y5: 180
What is the net present value of the investment, assuming a 6% cost of capital and a 900 initial investment?
