Optimal time to abandon investment
Not what you're looking for?
1. An asset costs $247,000 and will generate cash benefits of $80,000 at the end of each year for six years for Hartford Corporation. Salvage values are $160,000, $145,000, $85,000, and $45,000 at the end of years 3, 4, 5, and 6 respectively. The required return is 5.25 percent.
Please compute the net present value, and the equivalent annuity and record these below:
Keep for 6 years ________________ ____________________
Keep for 5 years ________________ ____________________
Keep for 4 years ________________ ____________________
Keep for 3 years ________________ ____________________
When is the optimal time to abandon the investment?_____________________
Purchase this Solution
Solution Summary
An asset costs $247,000 and will generate cash benefits of $80,000 at the end of each year for six years for Hartford Corporation. Salvage values are $160,000, $145,000, $85,000, and $45,000 at the end of years 3, 4, 5, and 6 respectively. The required return is 5.25 percent.
Please compute the net present value, and the equivalent annuity and record these below:
Keep for 6 years ________________ ____________________
Keep for 5 years ________________ ____________________
Keep for 4 years ________________ ____________________
Keep for 3 years ________________ ____________________
When is the optimal time to abandon the investment?_____________________
Credit Value: 1 Deadline: September 16, 2016, 2:21 pm
Education
- MPhil, Madurai Kamaraj University
- MCom, Annamalai University
- IATA, International Air Transport Association
Recent Feedback
- "Great explanations on how the answers were obtained."
- "Love the way she explains everything step by step."
- "Solutions were thoroughly explained."
- "Excellent explanations of how problems are solved"
- "Thanks"
Purchase this Solution
Free BrainMass Quizzes
Introduction to Finance
This quiz test introductory finance topics.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Basics of corporate finance
These questions will test you on your knowledge of finance.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.