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1.
Witchita:
Annual net cash flow (at the end of each of 6 years)
Present value of an annuity of $1 at 20% for 6 years (Exh. 2)
Present value of annual net cash flows
Less amount to be invested
Net present value
Topeka:
Annual net cash flow (at the end of each of 4 years)
Present value of an annuity of $1 at 20% for 4 years (Exh. 2)
Present value of annual net cash flows
Less amount to be invested
Net present value
2.
Present
Value of
$1 at 20% Witchita Topeka Witchita Topeka
Year 1
Year 2
Year 3
Year 4
Year 4 (resid. value)
Total
Amount to be invested
Net present value
3.
Net Present Value Analysis
Net Present Value Analysis
[Key essay answer here]
Problem 25(10)-5B
Name:
Section:
0%
Score:
Key Code:
Instructions
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Net Cash Flow
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Present Value of
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Enter a zero in cells you would otherwise leave blank.
1.
Witchita:
Annual net cash flow (at the end of each of 6 years) 310,000$
Present value of an annuity of $1 at 20% for 6 years (Exh. 2) 3.326
2.
Present
Value of
$1 at 20% Witchita Topeka Witchita Topeka
Year 1 0.833 310,000$ 400,000$ 258,230$ 333,200$
Year 2 0.694 310,000 400,000 215,140 277,600
Present Value of
Net Present Value Analysis
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Score:
Instructions
Answers are entered in the cells with gray backgrounds.
Net Present Value Analysis
Net Cash Flow
Net Cash Flow
Problem 25(10)-5B
Name:
Solution
Section:
ON