The Horizon Company will invest $52,000 in a temporary project that will generate the following cash...
50.1K
Verified Solution
Link Copied!
Question
Finance
The Horizon Company will invest $52,000 in a temporary projectthat will generate the following cash inflows for the next threeyears. Use Appendix B for an approximate answer but calculate yourfinal answer using the formula and financial calculatormethods.
Year Cash Flow 1 $ 17,000 2 32,000 3 22,000
The firm will also be required to spend $11,000 to close downthe project at the end of the three years.
a. Compute the net present value if the cost ofcapital is 9 percent. (Negative amount should be indicatedby a minus sign. Do not round intermediate calculations and roundyour answer to 2 decimal places.)
 Â
b. Should the investment be undertaken?
 Â
No
Yes
The Horizon Company will invest $52,000 in a temporary projectthat will generate the following cash inflows for the next threeyears. Use Appendix B for an approximate answer but calculate yourfinal answer using the formula and financial calculatormethods.
| Year | Cash Flow | |||
| 1 | $ | 17,000 | ||
| 2 | 32,000 | |||
| 3 | 22,000 | |||
The firm will also be required to spend $11,000 to close downthe project at the end of the three years.
a. Compute the net present value if the cost ofcapital is 9 percent. (Negative amount should be indicatedby a minus sign. Do not round intermediate calculations and roundyour answer to 2 decimal places.)
 Â
b. Should the investment be undertaken?
 Â
No
Yes
Answer & Explanation Solved by verified expert
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!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.