Present Value of Series of Unequal Payments
Casper Sporting Goods Co. is considering a $1 million capital investment that will provide the following expected net receipts at the end of each of the next six years.
|
Year |
Expected Net Receipts |
|
1 |
$195,000 |
|
2 |
457,000 |
|
3 |
593,000 |
|
4 |
421,000 |
|
5 |
95,000 |
|
6 |
5,000 |
Casper will make the investment only if the rate of return is greater than 12%.Will Casper make the investment?