A firm has the following investment alternatives:

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A firm has the following investment alternatives:

 

 

Cash flows

Year

A

B

C

1

$400

-

-

2

$400

$400

-

3

$400

800

-

4

$400

800

1,800

 

Each investment cost 1,400 and the firm cost of capital is 10 percent.

(A) What is each investment rate of return?

(B) Should the firm make any of these investments?

(C) what is each investment’s net present value?

 

(D) Should the firm make any of these investments?

    • 10 years ago
    A firm has the following investment alternatives:
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