Question
In: Accounting
Park Co. is considering an investment that requires immediate payment of $21,555 and provides expected cash...
Park Co. is considering an investment that requires immediate payment of $21,555 and provides expected cash inflows of $6,800 annually for four years. Park Co. requires a 8% return on its investments.
1-a. What is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1)
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1-b. Based on NPV alone, should Park Co. invest?
1-c. What is the internal rate of return? (PV of $1, FV of $1, PVA of $1, and FVA of $1)
1-d. Based on its internal rate of return, should Park Co. make the investment?
Solutions
ekkarill92 answered 2 years agoRelated Solutions
Part 1: Park Co. is considering an investment that requires immediate payment of $29,500 and provides...
Part 1:
Park Co. is considering an investment that requires immediate
payment of $29,500 and provides expected cash inflows of $14,400
annually for four years. What is the investment's payback
period?
Payback Period
Choose Numerator:
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Choose Denominator:
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Payback Period
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=
Payback
period
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0
Part 2:
Park Co. is considering an investment that requires immediate
payment of $21,530 and provides expected cash inflows of $6,500
annually for four years. If Park Co. requires a 7% return on...
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$24,000 one year later. If your required rate of return is 9%, what
is net present value of this opportunity?
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Year Payment
1
RM63,000
2
RM69,500
3
RM32,900
4
RM79,750
5
RM62,400
6
RM38,550
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9.88%
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10.87%
6.42%
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