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A factory costs $400,000. You forecast that it will produce cash inflows of $85,000 in year 1, $145,000 in year 2, and $230,000 in year
| A factory costs $400,000. You forecast that it will produce cash inflows of $85,000 in year 1, $145,000 in year 2, and $230,000 in year 3. The discount rate is 10%. |
| a. | Calculate the PV of cash inflows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Present value | $ |
| b. | Is the factory a good investment? |
multiple choice
|
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