12 13 Coyne Corporation is evaluating a capital investment opportunity. This project would require an initial investment of $31,000 to purchase equipment. The equipment will have a residual value at the end of its life of $1.000 The useful life of the equipment is 4 years. The new project is expected to generate additional net cash inflows of $22.000 per year for each of the four years. Coyne's required rate of return is 12% The net present value of this project is closest to (Cack the icon to view the present value of $1 table) 131 (Cick the icon to view the present value of annuity of $1 table) OA. $18,656 OB. $35.814 OC. $36,450 OD. 547,734 Data table Present Value of $1 Periods 3 4 5 6 Data table 10% 0.751 0.683 3 4 5 6 0.621 0.564 Present Value of Annuity of $1 Periods 10% 2.487 E [0 3.170 3.791 4.355 12% 0712 0.636 0.567 0.507 Print Print 12% 2.402 3.037 3.605 4.111 Done Done 14% 0.675 0.592 0.519 0.456 14% 2.322 2.914 3.433 3.889 16% 0.641 0.552 0.476 0.410 16% 2.246 2.798 3.274 3.685 <- X ent is s requ requi

12 13 Coyne Corporation is evaluating a capital investment opportunity. This project would require an initial investment of $31,000 to purchase equipment. The equipment will have a residual value at the end of its life of $1.000 The useful life of the equipment is 4 years. The new project is expected to generate additional net cash inflows of $22.000 per year for each of the four years. Coyne's required rate of return is 12% The net present value of this project is closest to (Cack the icon to view the present value of $1 table) 131 (Cick the icon to view the present value of annuity of $1 table) OA. $18,656 OB. $35.814 OC. $36,450 OD. 547,734 Data table Present Value of $1 Periods 3 4 5 6 Data table 10% 0.751 0.683 3 4 5 6 0.621 0.564 Present Value of Annuity of $1 Periods 10% 2.487 E [0 3.170 3.791 4.355 12% 0712 0.636 0.567 0.507 Print Print 12% 2.402 3.037 3.605 4.111 Done Done 14% 0.675 0.592 0.519 0.456 14% 2.322 2.914 3.433 3.889 16% 0.641 0.552 0.476 0.410 16% 2.246 2.798 3.274 3.685 <- X ent is s requ requi

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section10.A: Mutually Exclusive Investments Having Unequal Lives

Problem 2P

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