Question
Salt River Copmany is evaluating a capital expenditure propsal that has the following predicted cash flows:
Intial investment $(43,270)
Operation
Year 1 20,000
Year 2 30,000
Year 3 10,000
Salvage 0
a. Using a discount rate of 14 percent, determine the net present value of the investment proposal. Show work.
b. Determine the proposal's internal rate of return. Show work.
Intial investment $(43,270)
Operation
Year 1 20,000
Year 2 30,000
Year 3 10,000
Salvage 0
a. Using a discount rate of 14 percent, determine the net present value of the investment proposal. Show work.
b. Determine the proposal's internal rate of return. Show work.