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

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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
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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.)

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