Question
14) Phoenix Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $330,000 and would
14)
| Phoenix Company can invest in each of three cheese-making projects: C1, C2, and C3. Each project requires an initial investment of $330,000 and would yield the following annual cash flows. (PV of $1,FV of $1,PVA of $1, andFVA of $1)(Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.) |
| C1 | C2 | C3 | ||||||||||
| Year 1 | $ | 46,000 | $ | 130,000 | $ | 214,000 | ||||||
| Year 2 | 142,000 | 130,000 | 94,000 | |||||||||
| Year 3 | 202,000 | 130,000 | 82,000 | |||||||||
| Totals | $ | 390,000 | $ | 390,000 | $ | 390,000 | ||||||
| (1) | Assuming that the company requires a 8% return from its investments, use net present value to determine which projects, if any, should be acquired.(Round your answers to the nearest whole dollar.) |
chart values are based on cash inflow/outflow year Project C1 Pv factor present value Project C2 cash inflow/outflowPv factor present value project c3 cash inflow/outflowPv factor present value 1 2 3 year 0 1 2 3 year 0 1 2 3
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
