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?