24.7

PV of $1 Table

FV of $1 Table

PVA of $1 Table

FVA of $1 Table

Quail Company is considering buying a food truck that will yield net cash inflows of $14,000 per year for seven years. The truck costs $41,000 and has an estimated $6,100 salvage value at the end of the seventh year. (PV of $1, FV of $1, PVA of $1, and FVA of \$1) (Use appropriate factor(s) from the tables provided. Enter negative net present values, if any, as negative values. Round your present value factor to 4 decimals.) What is the net present value of this investment assuming a required 8% return? Table B.1* Present Value of 1 p=1/(1+i)n years from today? Using the factors of n=12 and i=5% (12 semiannual periods and a semiannual rate of 5\%), the factor is 0.5568 . You would need to invest $2,784 today ( $5,000 0.5568 ). Table B. 2 Future Value of 1 f=(1+i)n the factors of n=20 and i=2%(20 quarterly periods and a quarterly interest rate of 2%), the factor is 1.4859. The accumulated value is $4,457.70 ( $3,0001.4859). Table B. 3 Present Value of an Annuity of 1 p=[11/(1+i)n]/i annual interest rate of 9% ? For ( n=10,i=9% ), the PV factor is 6.4177. $2,000 per year for 10 years is the equivalent of $12,835 today ( $2,0006.4177 ). Table B. 4 Future Value of an Annuity of 1 f=[(1+i)n1]/i annual interest rate of 8% ? For (n=6,i=8%), the FV factor is 7.3359.$4,000 per year for 6 years accumulates to $29,343.60 ( $4,0007.3359)