Problem Set 10

Problem Set 10 - BusM 401 Problem Set #10 Discounted Cash...

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BusM 401 Problem Set #10 Discounted Cash Flow Analysis Instructions: Complete all questions. This problem set is worth 10 points. Problems sets are graded on effort and completeness; you must show your work in order to get full credit. Short answers (“checkpoints”) are available for some questions on Blackboard so that you can check your answers. Full solutions are available on Blackboard after the problem set is due. (Some full answers are found in the back of Higgins; it’s best not to look at these until you have tried your best to answer the question.) Prepare to be enlightened. 1. a. You are performing a discounted cash flow analysis on a project that requires a special piece of machinery that is owned by your firm but that is no longer being used in any other capacity. If your firm sold the machinery today, it would probably sell for about $10,000. The machinery was purchased for $50,000 (in present value terms) two years earlier. One year ago, your firm spent an additional $20,000 (in present value terms) to modify the
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This note was uploaded on 03/01/2012 for the course BUS M 401 taught by Professor Toddmitton during the Fall '10 term at BYU.

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Problem Set 10 - BusM 401 Problem Set #10 Discounted Cash...

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