10. Present values (2.1) A project produces a cash flow of $432 in year 1, $137 in year 2, and $797 in year 3. If the cost of capital is 15%, what is the project's PV? If the project requires an investment of $1,200, what is its NPV?

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter10: The Basics Of Capital Budgeting: Evaluating Cash Flows
Section10.6: Profitability Index (pi)
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10. Present values (2.1) A project produces a cash flow of $432 in year 1, $137 in year 2, and $797 in year 3. If the cost of capital
is 15%, what is the project's PV? If the project requires an investment of $1,200, what is its NPV?
Transcribed Image Text:10. Present values (2.1) A project produces a cash flow of $432 in year 1, $137 in year 2, and $797 in year 3. If the cost of capital is 15%, what is the project's PV? If the project requires an investment of $1,200, what is its NPV?
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