19An Investment Costing $100,000 Promises an After-Tax Cash Flow of $36,000

question 19

Essay

19.An investment costing $100,000 promises an after-tax cash flow of $36,000 per year for 6 years.
a.Find the investment's accounting rate of return and its payback period.
b.Find the investment's net present value at a 15 percent discount rate.
c.Find the investment's benefit-cost ratio (profitability index)at a 15 percent discount rate.
d.Find the investment's internal rate of return.
e.Assuming the required rate of return on the investment is 15 percent,which of the above figures of merit indicate the investment is attractive?
Which indicate it is unattractive?

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Definitions:

Extreme Values

Observations that are significantly higher or lower than the majority of data points in a dataset.

Distribution of Weights

The spread of different weights within a dataset, showing how often each weight occurs.

Quartiles

Values that divide a data set into four equal parts, representing the distribution of the data from the lowest to the highest values.

Weights of Police Officers

Refers to the body mass of police officers, which can be a factor in physical fitness assessments or health evaluations.