Question
A company is investing in a solar panel system to reduce its electricity costs. The system requires a cash payment of $101,273.50 today. The system
A company is investing in a solar panel system to reduce its electricity costs. The system requires a cash payment of $101,273.50 today. The system is expected to generate net cash flows of $10,501 per year for the next 35 years. The investment has zero salvage value. The company requires an 8% return on its investments. 1-a. Compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) 1-b. Should the project be accepted?
n =35
i =8%
Cash Flow Amount PV Factor Present Value
Present Value of an Annuity of 1 ? x ? =?
Immediate cash outflows =?
Net present value =?
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