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A company is considering a $188,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments.
A company is considering a $188,000 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 FVA of $1) (Use appropriate factor(s) from the tables provided.) Net Cash Flow Year 1 $11,000 Year 2 $32,000 (a) Compute the net present value of this investment. (b) Should the machinery be purchased? Year 3 $62,000 Year 4 $47,000 Year 5 $126,000 Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. (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 $ 11,000 Year 2 32,000 Year 3 62,000 Year 4 47,000 Year 5 126,000 Totals $ 278,000 $ 0 Initial investment Net present value $ 0
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