contestada

Velma and Keota (V&K) is considering an investment opportunitiy. The investment requires V&K to spend $11,751.44 to acquire a piece of asset. The asset will have an expected useful life of five years and no salvage value. This investment will generate expected cash inflows of $3,100 per year for the next five years. V&K has established a 9 percent minimum rate of return for all investments. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required Calculate the total present value of all cash inflows for this investment opportunity. (Round final answer to the second decimal point. Do not round intermediate calculations.) Calculate the net present value of this investment opportunity. (Round final answer to the second decimal point. Do not round intermediate calculations.) Calculate the internal rate of return for this investment opportunity.

Respuesta :

Answer:

The total present values of cash inflows is $12,057.92

The net present value is $306.48  

The IRR is 10%

Explanation:

The total present values was computed by multiplying each of the cash flow by a discount factor ,which is given as 1/(1+r)^n

r is the percent minimum  rate of return

n is the relevant year of cash flow

The computation is found in the attached.

The net present is the sum of present of inflows minus cash outflow

The formula for IRR is ,=irr(values) as contained in the excel file attached.

Ver imagen abdulmajeedabiodunac

Otras preguntas