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)

Cash Flow	Select Chart	Amount	x	PV Factor	=	Present Value
Annual cash flow	Present Value of an Annuity of 1				=	$0

	Net present value

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

Expert Solution

ekkarill92 answered 2 years ago

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