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Calculate the net present value of the investment

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Reference no: EM133107393

Question 1 - Kaplan Inc. had 100,000 in unit-sales during the last quarter of last year. Managers expect the sales to increase by 10% each quarter over the next four quarters. The selling price is expected to remain the same for the next four quarters at $2 per unit. What is the quarter-specific budgeted sales revenue for the 4th quarter of the coming year?

Question 2 - Disintegration, Inc. is considering a long-term investment. The investment will require an investment of $72,000. It will have a useful life of 5 years, and no salvage (i.e., ending) value.

Annual cash savings from the investment are $40,000, and annual cash outflows are $16,000.

Assume that cash flows other than the initial investment occur evenly throughout the year.

What is the payback period?

Question 3 - Seventeen Seconds, Inc. is considering a long-term investment. The investment will require an investment of $40,000. It will have a useful life of 2 years, and no salvage (i.e., ending) value.

Annual cash savings from the investment are $22,000.

Assume that cash flows other than the initial investment occur at the end of the year, and that the cost of capital (i.e., discount rate) is 10%.

Calculate the net present value of the investment.

Reference no: EM133107393

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