The Present worth of the company offering good deal of 3,000,000 in cash uopn signing the agreement followed by 10 annual payments of 300,000 starting one year later, the value of money is 10% and the present worth of the company is 4,841,698. Please do the Sensitivity analysis and find how sensitive the present worth of 4,841,698 to initial cash upon signing, amount of payments, their frequency and rate of return.

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 19EA: Redbird Company is considering a project with an initial investment of $265,000 in new equipment...
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The Present worth of the company offering good deal of 3,000,000 in cash uopn signing the agreement followed by 10 annual payments of 300,000 starting one year later, the value of money is 10% and the present worth of the company is 4,841,698. Please do the Sensitivity analysis and find how sensitive the present worth of 4,841,698 to initial cash upon signing, amount of payments, their frequency and rate of return.

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