14 02% c. d. 15.01% 50. You are making a $120,000 investment and feel that a 20%

Question

14 02% c. d. 15.01% 50. You are making a $120,000 investment and feel that a 20% rate of return is reasonable given the nature of risks invelved. You expect to receive $48,000 in the first year, $54,000 in the second year, and $76,000 in th third year. You expect to pay out $12,000 as a disposal cost in the fourth year, What is the net present valus this investment given your expectations? Should you accept or reject the projeet? a $15,879.63, reject 15,879 63, accept d $16,233 33 rejeet e$18,53425 accept MacBookA F5 !

Explanation / Answer

NPV=-120000+48000/1.2+54000/1.2^2+76000/1.2^3-12000/1.2^4=-4305.56

As NPV is less than zero, we should reject the project

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.