Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Brief Exercise 25-06 Swifty Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost

image text in transcribed

Brief Exercise 25-06 Swifty Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $245,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $43,300 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $253,000, will have a total useful life of 11 years (including the year just completed), and will produce net annual cash flows of $36,500 per year. Click here to view PV table. Evaluate the success of the project. Assume a discount rate of 9%. (If the net present value 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 a success

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting The Cornerstone Of Business Decision Making

Authors: Jay S Rich, Jeff Jones, Linda Ann Myers

5th Edition

0357132696, 978-0357132692

More Books

Students also viewed these Accounting questions

Question

2. Define nominal exchange rate and real exchange rate.

Answered: 1 week ago