Business, 27.08.2021 18:40 juliannabartra
Lakefront Company is considering investing in a new dock that will cost $560,000, the company expects to use the dock for 5 years, after which it will be sold for $300,000. Lakefront anticipates annual cash flows of $110,000 resulting from the new dock. The company's borrowing rate is 8%, while its cost of capital is 10%.
Calculate the net present value of the dock and indicate whether Lakefront should make the investment.
a. $186,276
b. $43,263
c. $416,987
d. $603,263
Answers: 2
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Lakefront Company is considering investing in a new dock that will cost $560,000, the company expect...
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