If you are offered to invest an amount of $ 100,000 in a business opportunity that...

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Finance

If you are offered to invest an amount of $ 100,000 in abusiness opportunity that expected to achieve operating cash inflowafter considering taxes (net of taxes & before depreciation) inthe future as follows:
Year (1) $ 32,000, Year (2) $ 35,000,Year (3) $ 40,000, & Year (4) $ 25,000
Would you accept this businessopportunity if the required rate of returns is 15%?
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If you have the following information about an investmentopportunity:
Initial investment (cash out- required capital) is $500,000
Expected operating cash inflows( after considering taxes) inyear (1) $ 200,000, in year (2) $ 260,000, in year (3) $ 250,000,& in year (4) $ 150,000
Calculate the payback period, the net present value ifthe cost of capital is % 15%, & also calculate the internalrate of return?

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4.0 Ratings (516 Votes)

Dear student only one question is allowed at a time I am answering the first question We have to calculate the net present value of the proposal Net present value Present See Answer

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If you are offered to invest an amount of $ 100,000 in abusiness opportunity that expected to achieve operating cash inflowafter considering taxes (net of taxes & before depreciation) inthe future as follows:Year (1) $ 32,000, Year (2) $ 35,000,Year (3) $ 40,000, & Year (4) $ 25,000Would you accept this businessopportunity if the required rate of returns is 15%?----------------------------------If you have the following information about an investmentopportunity:Initial investment (cash out- required capital) is $500,000Expected operating cash inflows( after considering taxes) inyear (1) $ 200,000, in year (2) $ 260,000, in year (3) $ 250,000,& in year (4) $ 150,000Calculate the payback period, the net present value ifthe cost of capital is % 15%, & also calculate the internalrate of return?