The world’s Largest Sharp Brain Virtual Experts Marketplace Just a click Away
Levels Tought:
Elementary,Middle School,High School,College,University,PHD
| Teaching Since: | Apr 2017 |
| Last Sign in: | 327 Weeks Ago, 6 Days Ago |
| Questions Answered: | 12843 |
| Tutorials Posted: | 12834 |
MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
TCO 9) Jordan Company buys equipment for $50,000 that will last for 4 years. The equipment will generate cash flows of $18,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 10% required rate of return.
Â
Required:
(a) What is the present value (PV) of this investment at 10%? (5 points)
(b) What is the net present value (NPV) of this investment? Should Jordan Company buy the equipment based on NPV? Justify your decision. (10 points)
(c) What is the internal rate of return (IRR) of this investment? (5 points)
(d) What is the payback period? (5 points) (Points : 25)
-----------