What is reasonable value for company a

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Using the information below and the appropriate discount rate, calculate Net Present Value.

Net Income for Company A  

2014: $300,000 

2015: $400,000 

2016: $500,000 

2017: $600,000 

2018: $700,000 

Expected growth for all years after 2018: 5% 

90-Day T-Bill Rate: 10% 

Appropriate % above risk-free rate: 12%

Using the information what is reasonable value for Company A based on its future income stream for 2014 to 2018?

What is the profitability index for a Net Present Value of benefits totaling $400,000 and Net Present Value of costs totaling $100,000?

Reference no: EM132419875

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