A factory costs $460,000. You forecast that it will produce cash inflows of $150,000 in year 1, $210,000 in year 2, and $360,000 in year 3. The discount rate is 12%. a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Is the factory a good investment?
A factory costs $460,000. You forecast that it will produce cash inflows of $150,000 in year 1, $210,000 in year 2, and $360,000 in year 3. The discount rate is 12%. a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Is the factory a good investment?
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 16EB: Project Y cost $8,000 and will generate net cash inflows of $1,500 in year one, $2,000 in year two,...
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a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
b. Is the factory a good investment?
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