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Blossom Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $255,000, would
Blossom Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $255,000, would have a useful life of 9 years and zero salvage value, and would result in net annual cash flows of $43,000 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $261,000, will have a total useful life of 11 years (including the year just completed), and will produce net annual cash flows of $36,000 per year. Click here to view the factor table. Evaluate the success of the project. Assume a discount rate of 8%. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to O decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Original estimate net present value $ Revised estimate net present value $ The project Save for Later a success. Attempts: 0 of 1 used Submit Answer
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