In 1-year the number of units sold will be revised either upward by 8,700 or downward by4,300 with equal probability.The initial values are as follows:S71Net cash flow per unitNo. of units soldInitial investmentLife of project5,700$1,680,00010Discount rate15%Scrape value in year-1$1,500,000Find the present value of option to abandon.(A) SI8,798(B) S17.798(C) SI8.978(D) S18.978

In 1-year the number of units sold will be revised either upward by 8,700 or downward by 4,300 with equal probability. The initial values are as follows: Net cash flow unit S71 per No. of units sold Initial investment Life of project Discount rate 5,700 S1,680,000 10 15% Scrape value in year-1 S1,500,000

In 1-year the number of units sold will be revised either upward by 8,700 or downward by 4,300 with equal probability. The initial values are as follows: Net cash flow unit S71 per No. of units sold Initial investment Life of project Discount rate 5,700 S1,680,000 10 15% Scrape value in year-1 S1,500,000

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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An investment of S80,000 is expected to generate a net annual income of $27,000 for 5 years. If the study period is 20 years, and assuming this aiternative will be repeated over the study period, what is the present worth of this investment if MARR is 13P O a $14,905 O b. $17,019 OE $4,255 Od S109,668 O e. $29,880
In 1-year the number of units sold will be revised either upward by 8,700 or downward by 4,300 with equal probability. The initial values are as follows: Net cash flow per unit S71 5,700 No. of units sold Initial investment S1,680,000 Life of project 10 Discount rate 15% Scrape value in year-1 S1,500,000 Find the present value of option to abandon. (A) S18,798 (B) S17.798 (C) SIS.978 (D) S18.978
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