Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cullumber Compary is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $224,000, would have

image text in transcribed
Cullumber Compary is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $224,000, would have a useful life of 9 years and zero galvage value, and would result in net annual cash flows of $44,900 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $228,000, will have a total useful life of 11 years (including the year just completed). and will produce net annual cash flows of $37,500 per year. Clickhere to view PV table. Evaluate the success of the project. Assume a discount rate of 12%. (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 0 decimal places, es. 125. For calculation purposes, use 5 decimal ploces as displayed in the foctor toble provided) Original estimate net present value Revised estimate net present value

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

Students also viewed these Accounting questions