Project will generate after tax cash flows

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Reference no: EM131348586

1. A machine costs $1,000 and has a 3 year life. The estimated salvage value at the end of three years is $100. The project will generate after tax cash flows of $600 per year. If the required rate of return is 10%, what is the NPV of the project?

a. $1,567

b. $567

c. $900

d. $492

2. It is desired to accumulate a fund of $X at the end of 10 years by depositing money at the end of each year such that $t at time t. The deposits earn interest 8% effective but the interest can be reinvested at only 4% effective. Calculate X.

A) 40

B) 50

C) 60

D) 70

E) 80

Reference no: EM131348586

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