You invest $500 today and an additional investment of $500 three years from today. You expect to receive the following cash flows: End of Year 1 $200 End of Year 2 $400 End of Year 3 $500 End of Year 4 $600 10. Refer to the cash flows above. If you assume a discount rate of 3% EAR, how much does the value today of the benefits exceed the value today of the costs? $604 11. Refer to the cash flows above. What is the return on your investment? 40.4%

You invest $500 today and an additional investment of $500 three years from today. You expect to receive the following cash flows: End of Year 1 $200 End of Year 2 $400 End of Year 3 $500 End of Year 4 $600 10. Refer to the cash flows above. If you assume a discount rate of 3% EAR, how much does the value today of the benefits exceed the value today of the costs? $604 11. Refer to the cash flows above. What is the return on your investment? 40.4%

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 16EA: Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in...

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