Assuming an interest rate of 5%, which three cash flows have the best Net Present Value? (Remember to show your work!): (Estimated Response Time for Average Student: 2 minutes) a. Cash Flows C, D, and F b. Cash Flows A, E, and D C Cash Flows D, E, and F d. Cash Flows D, F, and G e. Cash Flows D, E, and G

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter5: Business And Economic Forecasting
Section: Chapter Questions
Problem 2E
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Question
Year
0
1
3
4
5
6
-Assuming an interest rate of 5%, which three cash flows have the best
Net Present Value? (Remember to show your work!):
Estimated Response Time for Average Student: 2 minutes)
a. Cash Flows C, D, and F
b. Cash Flows A, E, and D
c. Cash Flows D, E, and F
d. Cash Flows D, F, and G
e. Cash Flows D, E, and G
-Assuming an interest rate of 5%, which three cash flows have the best
Equivalent Uniform Annual Worth (EU AW)? (Remember to show your work!):
(Estimased Response Time for Average Student: 2 minutes)
a. Cash Flows A, D, and G
b. Cash Flows C, D, and E
c. Cash Flows B, C, and F
d. Cash Flows E, F, and G
e. Cash Flows C, E, and F
B
A
($75,000) $75,000)
$15,000
$0
$15,000
$0
$15,000
$15,000
$15,000
C
($75,000)
D
$75,000)
$0
$50,000
$0
$25,000
$27,000
$10,000
$15,000 $54,000 $5,000 $105,000
$0
$0
E
($75,000)
$5,000
$5,000
$5,000
$5,000
$72,500
$2,500
I
F
00)
$37,750
$5,000
$0
$0
$5,000
$37,750
G
($75,000)
$0
$52,750
$27,750
$0
$0
$10,000
Transcribed Image Text:Year 0 1 3 4 5 6 -Assuming an interest rate of 5%, which three cash flows have the best Net Present Value? (Remember to show your work!): Estimated Response Time for Average Student: 2 minutes) a. Cash Flows C, D, and F b. Cash Flows A, E, and D c. Cash Flows D, E, and F d. Cash Flows D, F, and G e. Cash Flows D, E, and G -Assuming an interest rate of 5%, which three cash flows have the best Equivalent Uniform Annual Worth (EU AW)? (Remember to show your work!): (Estimased Response Time for Average Student: 2 minutes) a. Cash Flows A, D, and G b. Cash Flows C, D, and E c. Cash Flows B, C, and F d. Cash Flows E, F, and G e. Cash Flows C, E, and F B A ($75,000) $75,000) $15,000 $0 $15,000 $0 $15,000 $15,000 $15,000 C ($75,000) D $75,000) $0 $50,000 $0 $25,000 $27,000 $10,000 $15,000 $54,000 $5,000 $105,000 $0 $0 E ($75,000) $5,000 $5,000 $5,000 $5,000 $72,500 $2,500 I F 00) $37,750 $5,000 $0 $0 $5,000 $37,750 G ($75,000) $0 $52,750 $27,750 $0 $0 $10,000
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