Question
Door to Door Moving Company is considering purchasing new equipment that costs $ 720 comma 000. Its management estimates that the equipment will generate cash
Door to Door Moving Company is considering purchasing new equipment that costs $ 720 comma 000. Its management estimates that the equipment will generate cash flows as follows: Year 1 $ 218 comma 000 2 218 comma 000 3 250 comma 000 4 250 comma 000 5 166 comma 000 Present value of $1: 6% 7% 8% 9% 10% 1 0.943 0.935 0.926 0.917 0.909 2 0.890 0.873 0.857 0.842 0.826 3 0.840 0.816 0.794 0.772 0.751 4 0.792 0.763 0.735 0.708 0.683 5 0.747 0.713 0.681 0.605 0.621 The company's annual required rate of return is 8%. Using the factors in the table, calculate the present value of the cash inflows. (Round all calculations to the nearest whole dollar.) A. $ 38 comma 804 B. $ 750 comma 000 C. $ 883 comma 990 D. $ 884 comma 000
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