Net present value and also the internal rate of return
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I need to find out the net present value of the cash flows and also the internal rate of return on the cash flows. Here are some more info:
The purchase price of the company is $5.74 million dollars and it as
shown as an "addition to PP&E" in year 0
- The $2.7 million dollar inflow in year 1 shown under "disposals of
PP&E" is the result of equipment that your company will sell after it
acquires the equipment from the company.
-Subsequent disposals in years 4, 8, & 12 are for other pieces of
equipment that your company will sell off as it becomes worn out.
- Your discount rate (hurdle rate) for purposes of this assignment is
13%.
- Your company has a September 30th year end, hence the September 30th
year end dates.
- The terminal value or horizon value shown in year 15 is based upon the
salvage value of the equipment remaining at the end of year 15.
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This provides the steps to calculate the Net present value of the cash flows and also the internal rate of return on the cash flows
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I need to find out the net present value of the cash flows and also the internal rate of return on the cash flows. Here are some more info:
The purchase price of the company is $5.74 million dollars and it as
shown as an ...
Purchase this Solution
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