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klemol [59]
4 years ago
7

A project will produce an operating cash flow of $14,600 a year for 7 years. the initial fixed asset investment in the project w

ill be $48,900. the net aftertax salvage value is estimated at $12,000 and will be received during the last year of the project's life. what is the net present value of the project if the required rate of return is 12 percent?
Business
1 answer:
Leviafan [203]4 years ago
3 0
<span>Answer: The net present value is the sum of the three present values. NPV = PV of initial investment + PV of 7 year annuity + PV of lump sum salvage NPV = -48900 + 14600 x (1 - 1 / (1 + 12%)^7) / 12% + 12000/(1+12%)^7 = 23,159.04</span>
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3 years ago
Which of the following is true about presentation methods for providing training? Audiovisual techniques are most effective when
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3 0
3 years ago
Find the accumulated value of $2,480 at the end of twelve years if the nominal interest rate was 2% convertible monthly for the
dusya [7]
In order to properly tackle this problem, we must understand the relationship between the nominal annual rate and real (effective) annual rate. 

To do this:
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   -Then, add one to that number, and raise that number to the power of how many times you compound per year.

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First 3 Years: 
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Next 2 Years (Discounting)
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Next 4 years (Interest)
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I kept the 1 in the numbers (1.058 instead of 5.8% for example) so that it's easier to find the final number

Take every relevant number and raise it to the power of the number of years it's compounded for. For discounting, raise it to a negative power.
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This is our final multiplier to find the effect on our principal:
.992598 * 2,480 = 2461.64

Answer is 2461.64
6 0
4 years ago
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