An investment has an installed cost of $527,630. The cash flows over the four-year life of...

60.1K

Verified Solution

Question

Finance

An investment has an installed cost of $527,630. The cash flowsover the four-year life of the investment are projected to be$212,200, $243,800, $203,500, and $167,410, respectively.
a. If the discount rate is zero, what is the NPV? (Do notround intermediate calculations.)
b. If the discount rate is infinite, what is the NPV? (Anegative answer should be indicated by a minussign. Do not round intermediate calculations.)
c. At what discount rate is the NPV just equal to zero?(Do not round intermediate calculations and enter youranswer as a percent rounded to 2 decimal places, e.g.,32.16.)

Answer & Explanation Solved by verified expert

4.2 Ratings (487 Votes)

a NPV PV of Cash Inflows PV of Cash Outflows 212200100 2438001002 2035001003 1674101004 527630 212200 243800 203500 167410 527630 299280 b If the required return See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

An investment has an installed cost of $527,630. The cash flowsover the four-year life of the investment are projected to be$212,200, $243,800, $203,500, and $167,410, respectively.a.If the discount rate is zero, what is the NPV? (Do notround intermediate calculations.)b.If the discount rate is infinite, what is the NPV? (Anegative answer should be indicated by a minussign. Do not round intermediate calculations.)c.At what discount rate is the NPV just equal to zero?(Do not round intermediate calculations and enter youranswer as a percent rounded to 2 decimal places, e.g.,32.16.)

a.	If the discount rate is zero, what is the NPV? (Do notround intermediate calculations.)
b.	If the discount rate is infinite, what is the NPV? (Anegative answer should be indicated by a minussign. Do not round intermediate calculations.)
c.	At what discount rate is the NPV just equal to zero?(Do not round intermediate calculations and enter youranswer as a percent rounded to 2 decimal places, e.g.,32.16.)