ou are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment End of Year A B C 1 $ 2,000 $ 2,000 $ 6,000 2 3,000 2,000 6,000 3 4,000 2,000 (6,000) 4 (5,000) 2,000 (6,000) 5 5,000 6,000 16,000 a. What is the present value of investment A at an annual discount rate of 13 percent? b. What is the present value of investment B at an annual discount rate of 13 percent? c. What is the present value of investment C at an annual discount rate of 13 percent?
ou are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Investment End of Year A B C 1 $ 2,000 $ 2,000 $ 6,000 2 3,000 2,000 6,000 3 4,000 2,000 (6,000) 4 (5,000) 2,000 (6,000) 5 5,000 6,000 16,000 a. What is the present value of investment A at an annual discount rate of 13 percent? b. What is the present value of investment B at an annual discount rate of 13 percent? c. What is the present value of investment C at an annual discount rate of 13 percent?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter12: Capital Investment Decisions
Section: Chapter Questions
Problem 52P
Related questions
Question
ou are given three investment alternatives to analyze. The cash flows from these three investments are as follows:
|
Investment
|
|
|||||||
|
End of Year
|
A
|
B
|
C
|
|||||
|---|---|---|---|---|---|---|---|---|
|
1
|
$
|
2,000
|
|
$
|
2,000
|
$
|
6,000
|
|
|
2
|
|
3,000
|
|
|
2,000
|
|
6,000
|
|
|
3
|
|
4,000
|
|
|
2,000
|
|
(6,000)
|
|
|
4
|
|
(5,000)
|
|
|
2,000
|
|
(6,000)
|
|
|
5
|
|
5,000
|
|
|
6,000
|
|
16,000
|
a. What is the present value of investment A at an annual discount rate of 13 percent?
b. What is the present value of investment B at an annual discount rate of 13 percent?
c. What is the present value of investment C at an annual discount rate of 13 percent?
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