Question
A factory costs $744,940. You forecast that it will produce cash inflows of $327,073 in year 1, $165,000 in year 2, and $270,000 in year
| A factory costs $744,940. You forecast that it will produce cash inflows of $327,073 in year 1, $165,000 in year 2, and $270,000 in year 3. The discount rate is 11.00%. |
| 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? |
| (Click to select)The firm should not investThe firm should invest |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Risk Manager Handbook
Authors: Philippe Jorion, Global Association Of Risk Professionals
5th Edition
0470479612, 978-0470479612
