Question
38. Pickleball Company is considering the following investment proposal: Initial investment: Depreciable assets (straight-line) $72,000 Working capital 8,000 Operations (per year for 4 years): Cash
38. Pickleball Company is considering the following investment proposal:
| Initial investment: |
|
| Depreciable assets (straight-line) | $72,000 |
| Working capital | 8,000 |
| Operations (per year for 4 years): |
|
| Cash receipts | $50,000 |
| Cash expenditures | 22,000 |
| Disinvestment: |
|
| Salvage value of equipment | $6,000 |
| Recovery of working capital | 8,000 |
| Discount rate: | 10 percent |
Additional information for interest rate of 10 percent and four time periods:
| Present value of $1 | 0.683 |
| Present value of an annuity of $1 | 3.170 |
What is the net present value for the investment?
$ 5,256
$18,322
$57,060
$65,256
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Accounting And Financial Analysis In The Hospitality Industry
Authors: Jonathan A. Hales
1st Edition
0750678968, 978-0750678964
