Question
A factory costs $611,800. You forecast that it will produce cash inflows of $204,280 in year 1, $125,000 in year 2, and $310,000 in year
| A factory costs $611,800. You forecast that it will produce cash inflows of $204,280 in year 1, $125,000 in year 2, and $310,000 in year 3. The discount rate is 9.00%. |
| 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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ISE Financial Institutions Management A Risk Management Approach
Authors: Anthony Saunders Professor, Marcia Millon Cornett, Otgo Erhemjamts
10th International Edition
1260571475, 9781260571479
