Problem 12-17 (Algo) Net present value and internal rate of return methods [LO12-4] The Hudson Corporation makes an investment of $37,120 that provides the following cash flow: Year 1 2 3 Cash Flow $ 18,000 18,000 12,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. What is the net present value at a discount rate of 10 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Net present value b. What is the internal rate of return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % c. Would you make the same decision under both parts a and b? Yes ○ No
Problem 12-17 (Algo) Net present value and internal rate of return methods [LO12-4] The Hudson Corporation makes an investment of $37,120 that provides the following cash flow: Year 1 2 3 Cash Flow $ 18,000 18,000 12,000 Use Appendix B and Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. What is the net present value at a discount rate of 10 percent? Note: Do not round intermediate calculations and round your answer to 2 decimal places. Net present value b. What is the internal rate of return? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Internal rate of return % c. Would you make the same decision under both parts a and b? Yes ○ No
Chapter7: Valuation Of Stocks And Corporations
Section: Chapter Questions
Problem 23SP
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![Problem 12-17 (Algo) Net present value and internal rate of return
methods [LO12-4]
The Hudson Corporation makes an investment of $37,120 that provides the following
cash flow:
Year
1
2
3
Cash Flow
$ 18,000
18,000
12,000
Use Appendix B and Appendix D for an approximate answer but calculate your final
answer using the formula and financial calculator methods.
a. What is the net present value at a discount rate of 10 percent?
Note: Do not round intermediate calculations and round your answer to 2
decimal places.
Net present value
b. What is the internal rate of return?
Note: Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.
Internal rate of return
%
c. Would you make the same decision under both parts a and b?
Yes
○ No](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe23feda9-6680-4714-bad5-eb3bad054451%2F31f74fa2-a3a0-4dc7-beb0-e541666f5a5b%2Fc3x7mj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 12-17 (Algo) Net present value and internal rate of return
methods [LO12-4]
The Hudson Corporation makes an investment of $37,120 that provides the following
cash flow:
Year
1
2
3
Cash Flow
$ 18,000
18,000
12,000
Use Appendix B and Appendix D for an approximate answer but calculate your final
answer using the formula and financial calculator methods.
a. What is the net present value at a discount rate of 10 percent?
Note: Do not round intermediate calculations and round your answer to 2
decimal places.
Net present value
b. What is the internal rate of return?
Note: Do not round intermediate calculations. Enter your answer as a percent
rounded to 2 decimal places.
Internal rate of return
%
c. Would you make the same decision under both parts a and b?
Yes
○ No
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