BlackFriday 2024! Hurry Up, Grab the Special Discount - Save 25% - Ends In 00:00:00 Coupon code: SAVE25
Free Preparation Discussions
MENU
IMANET Exam CMA Topic 5 Question 94 Discussion
Actual exam question for
IMANET's
CMA exam
Question #: 94
Topic #: 5
[All CMA Questions]
Topic #: 5
The Hopkins Company has estimated that a proposed project's 10-year annual net cash benefit, received each year end. will be $2,500 with an additional terminal benefit of $5,000 at the end of the 10th year. Assuming that these cash inflows satisfy exactly Hopkins' required rate of return of 8%, calculate the initial cash outlay
Suggested Answer:
B
If the 8% return exactly equals the present value of the future flows ., NPV is zero), then simply determine the present value of the future inflows. Thus, Hopkins Company's initial cash outlay is $19,090 [($2,500)(PVIFA at 8% for 10 periods) + ($5J00)(PVlF at 8% for 10 periods ($2,500)(6.710) + ($5,000)(.463)].
Kattie
2 months agoJerry
2 months agoMargo
2 months agoCarin
1 months agoOcie
2 months agoMattie
2 months agoDwight
2 months agoFrancesco
2 months agoAdell
2 months agoMargurite
2 months agoDelsie
2 months agoAfton
3 months agoGabriele
3 months agoIzetta
3 months agoSabra
2 months agoHoney
2 months agoLasandra
2 months agoDesire
3 months agoSheldon
3 months agoBecky
3 months agoSkye
4 months agoDorathy
3 months agoOwen
3 months agoDeonna
3 months agoJerlene
3 months agoSheldon
4 months ago