Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

can i get help with this question 5 please there two small parts i don't understand Santana Rey is considering the purchase of equipment for

image text in transcribedimage text in transcribedimage text in transcribed
can i get help with this question 5 please there two small parts i don't understand
image text in transcribed
image text in transcribed
image text in transcribed
Santana Rey is considering the purchase of equipment for Business Solutions that would allow the company to add a new product to its computer furniture line. The equipment is expected to cost $300,000 and to have a six- year life and no salvage value. The equipment is expected to generate income of $12,939 and net cash flow of $62,939 in each year of its six-year life. Santana requires an 8% return on all investments. (PV of $1. FV of $1. PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided.) (Negative net present values should be indicated with a minus sign. Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole number.) Compute the net present value for this equipment Cash Flow nnual cash flow Net Cash X Flows $ 62.939 x Present Value of Annuity at 9% Present Value of Net Cash Flows S Select Chart Present Value of an Annuity of 1 Initial investment Net present value 300,00 Compute internal rate of return for this equipment. Present Value Factor Numerator: Denominator: Initial investment 1 Annual net cash flow Present Value Factor $ 300,000 $ 62,939 4.7665 Find this factor on the appropriate table to estimate the Internal Rate of Return n = Internal Rate of Return %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

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

Step: 2

blur-text-image

Step: 3

blur-text-image

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 And Managerial Accounting Information For Decisions

Authors: John Wild, Ken Shaw, Barbara Chiappetta

7th Edition

1259726703, 9781259726705

Students also viewed these Accounting questions