Question
Brett Collins is reviewing his companys investment in a cement plant. The company paid $15,900,000 five years ago to acquire the plant. Now top management
Brett Collins is reviewing his companys investment in a cement plant. The company paid $15,900,000 five years ago to acquire the plant. Now top management is considering an opportunity to sell it. The president wants to know whether the plant has met original expectations before he decides its fate. The companys desired rate of return for present value computations is 9 percent. Expected and actual cash flows follow. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||||||||||
| Expected | $ | 3,340,000 | $ | 4,950,000 | $ | 4,600,000 | $ | 5,000,000 | $ | 4,260,000 | |||||
| Actual | 2,680,000 | 3,040,000 | 4,830,000 | 3,840,000 | 3,590,000 | ||||||||||
Required
a.&b. Compute the net present value of the expected and actual cash flows as of the beginning of the investment. (Negative amounts should be indicated by a minus sign. Round your intermediate calculations and final answer to the nearest whole dollar.)
Please be aware that the answers are not 1,190,880 or -2,101,780 !!
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Management Reporting Und Behavioral Accounting Verhaltenswirkungen Des Berichtswesens Im Unternehmen
Authors: Andreas Taschner
2nd., 2nd. Auflage Aufl. 2019 Edition
3658234911, 978-3658234911
