What is the net present value npv of this investment if you


Problem

Harry Corp buys equipment for $224,888 that will last for 9 years. The equipment will generate cash flows of $36,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 10% required rate of return.

(a) What is the Present Value (PV) of this investment (at 10%)?.

(b) What is the NET Present Value (NPV) of this investment? If you need 10%, should you buy the equipment?

(c) What is the Internal Rate of Return (IRR) of this investment?

(d) What is the payback period?

Solution Preview :

Prepared by a verified Expert
Accounting Basics: What is the net present value npv of this investment if you
Reference No:- TGS02615373

Now Priced at $20 (50% Discount)

Recommended (91%)

Rated (4.3/5)