1 brandon buys a piece of equipment for 13000 he pays 5000, Ask an Expert

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1. Brandon buys a piece of equipment for $13,000. He pays $5,000 for upgrades in year 1 and the equipment generates $2,000 in cash flow for year 1. In year 2 the equipment generates $8,000, year 3 it generates $4,000, but Brandon sells it for $6,000 but also pays a $500 commission. Assume a required rate of return of 8%. What is the NPV?

-1,378.

1,378.

-2,178.

2,178.

2. What is the NPV of the required return (14.4840) if the project has an initial cost of $1400 and is expected to produce the annual cash flow of $350 for 7 years? What if the $350 annual cash flow continues forever.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92772635

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