Question
A factory costs $592,000. You forecast that it will produce cash inflows of $496,080 in year 1, $245,000 in year 2, and $270,000 in year
| A factory costs $592,000. You forecast that it will produce cash inflows of $496,080 in year 1, $245,000 in year 2, and $270,000 in year 3. The discount rate is 14.50%. |
| a. | Calculate the PV of cash inflows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) |
| Present value | $ |
| b. | Should the company invest in the factor? |
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International Finance Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
10th edition
978-0133425895, 133425894, 978-0133423631, 133423638, 978-0133423648
