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2071-QzFeb3 - ACG 2071 Participation Quiz 10:50TR 6 points...

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ACG 2071 Participation Quiz 10:50TR – 6 points – February 3, 2010 Enter answers into your clicker displaying with no decimals for $ answers, and two decimals for percentage answers (E.g. if 9.346% is the percentage answer enter as 9.35 (as if a % follows)). Q1. Harrison Company’s required rate of return is 6.5% and its cost of capital is 4.2%. The company is considering an investment of $44,000 which would yield net income of $8,700 and a net annual cash inflow of $12,800 for four years. How much is the NPV? See format directions above. Q2. The following data pertains to an investment proposal: Required investment $75,000 Projected salvage value $6,200 Annual cash cost savings $12,400 Required rate of return 7.11% Projected life of investment 6 years Cost of capital 6.21% How much is the IRR of the proposed investment? See format directions above Q3. Assume you are solving for NPV using Excel. Type the discount rate in your clicker for the situation in Q2 in the format in which you must enter it in the Excel wizard. Assume a % sign is not an option.
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