Question
1. The following present value factors are provided for use in this problem. Periods Present Value of $1 at 12% Present Value of an Annuity
1. The following present value factors are provided for use in this problem.
| Periods | Present Value of $1 at 12% | Present Value of an Annuity of $1 at 12% | ||||
| 1 | 0.8929 | 0.8929 | ||||
| 2 | 0.7972 | 1.6901 | ||||
| 3 | 0.7118 | 2.4018 | ||||
| 4 | 0.6355 | 3.0373 | ||||
Cliff Co. wants to purchase a machine for $50,000, but needs to earn an 12% return. The expected year-end net cash flows are $18,000 in each of the first three years, and $22,000 in the fourth year. What is the machine's net present value?
2.
The following information relates to the manufacturing operations of the JNR Printing Company for the year:
| Beginning | Ending | |||||
| Raw materials inventory | $ | 57,000 | $ | 60,000 | ||
| Finished goods | 68,000 | 60,000 | ||||
The raw materials used in manufacturing during the year totaled $118,000. Raw materials purchased during the year amount to:
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