 |
|
| Browse | Ask | Answer | Search | Join/Login |
|
|
||||
|
Answer to net present value question?
Planning for capital investments is an important function of management. You are provided with the following data concerning a proposed capital investment: cash cost $220,000, net annual cash flows $40,000, present value factor of cash inflows for ten years 5065 (rounded). Determine the net present value, and indicate whether the investment should be made. (1) Explain the pros and cons of using this method to evaluate a capital expenditure and (2) show all computations required to arrive at the correct solution.
|
||||
Check out some similar questions!
How do I calculate the NPV of cash inflow and out flows Sales are at 225,000 in the first year and incremental @ 6% per year for 10 years. Expenses at 190,000 in the firs year and incremental @ 5% per year for 10 years. Tax rate @ 34%. Thanks
Project A requires an original investment of $65,000. The project will yield cash flows of $15,000 per year for seven years. Project B has a calculated net present value of $5,500 over a five year life. Project a could be sold at the end of five years for a price of $30,000. (a) Using the proper...
Should we purchase that new copier? Campus Print Shop is thinking of purchasing a new, modern copier that automatically collates pages. The machine would cost $22,000 cash. A service contract on the machine, considered a must because of its complexity, would be an additional $200 per month. The...
View more questions Search
| Question Tools | Search this Question |
Add your answer here.
|
