A firm has the following investment alternatives: $\begin{array}{cccc}&&\text { Cash Inflow }\
\text { Year } &A&B&C\
1 & \$ 400 & \$-- & \$-- \
2 & 400 & 400 & -- \
3 & 400 & 800 & -- \
4 & 400 & 800 & 1,800
\end{array}$

Each investment costs $1,400 and the firm's cost of capital is 10 percent.
a. What is each investment's internal rate of return?
b. Should the firm make any of these investments?
c. What is each investment's net present value?
d. Should the firm make any of these investments?

Question

A firm has the following investment alternatives:​ $\begin{array}{cccc}&&\text { Cash Inflow }\
\text { Year } &A&B&C\
1 & \$ 400 & \$-- & \$-- \
2 & 400 & 400 & -- \
3 & 400 & 800 & -- \
4 & 400 & 800 & 1,800
\end{array}$

Each investment costs $1,400 and the firm's cost of capital is 10 percent.
a. What is each investment's internal rate of return?
b. Should the firm make any of these investments?
c. What is each investment's net present value?
d. Should the firm make any of these investments?

Quizplus · Accepted Answer

The Answer of A firm has the following investment alternatives:​ $\begin{array}{cccc}&&\text { Cash Inflow }\
\text { Year } &A&B&C\
1 & \$ 400 & \$-- & \$-- \
2 & 400 & 400 & -- \
3 & 400 & 800 & -- \
4 & 400 & 800 & 1,800
\end{array}$

Each investment costs $1,400 and the firm's cost of capital is 10 percent.
a. What is each investment's internal rate of return?
b. Should the firm make any of these investments?
c. What is each investment's net present value?
d. Should the firm make any of these investments?

A Firm Has the Following Investment Alternatives:​ Each Investment Costs $1,400 and the Firm's Cost of Capital

A Firm Has the Following Investment Alternatives: Each Investment Costs $1,400 and the Firm's Cost of Capital