Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A company is considering a $162,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments.
A company is considering a $162,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. (PV of $1. FV of $1. PVA of $1, and EVA of $1) Note: Use appropriate factor(s) from the tables provided. Net Cash Flow Year 11 $10,000 Year 2 $28,000 Year 3 $53,000 Year 4 $41,000 Year 5 $109,000 (a) Compute the net present value of this investment. (b) Should the machinery be purchased? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. Note: Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar. Year Present Value of Net Cash Flows Present Value Factor Net Cash Flows Year 1 Year 2 Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. Note: Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar, Net Cash Year Flows Present Value Factor Present Value of Net Cash Flows Year 1 Year 2 Year 31 Year 4 Year 5 Totals 0 $ Initial Investment. Net present value (a) Compute the net present value of this investment. (b) Should the machinery be purchased? Complete this question by entering your answers in the tabs below. Required A Required B Should the machinery be purchased? Should the machinery be purchased? Yes No
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started