Given the following regarding ABC corp. & XYZ corp.: ABC 2020 2021 2022 2023 Op Cash 50000 55000 60000 62000 Cap Ex 20000 21000 25000 26000 Dividends 10000 12000 13000 15000   XYZ 2020 2021 2022 2023 Op Cash 50000 55000 60000 62000 Cap Ex 5000 4000 2500 2000 Dividends 0 0 0 0   Required investment: ABC = $50,000, XYZ = $150,000. Discount rate = 4% Find the dollar value of the discounted net return (NPV-Initial investment) on ABC

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Given the following regarding ABC corp. & XYZ corp.:

ABC 2020 2021 2022 2023
Op Cash 50000 55000 60000 62000
Cap Ex 20000 21000 25000 26000
Dividends 10000 12000 13000 15000

 

XYZ 2020 2021 2022 2023
Op Cash 50000 55000 60000 62000
Cap Ex 5000 4000 2500 2000
Dividends 0 0 0 0

 

Required investment: ABC = $50,000, XYZ = $150,000.

Discount rate = 4%

Find the dollar value of the discounted net return (NPV-Initial investment) on ABC

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