Question
Exercise 24-8 (Algo) Net present value and unequal cash flows LO P3 A company is considering a $159,000 investment in machinery with the following net
Exercise 24-8 (Algo) Net present value and unequal cash flows LO P3
A company is considering a $159,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
|---|---|---|---|---|---|
| Net Cash Flow | $10,000 | $27,000 | $52,000 | $40,000 | $107,000 |
(a) Compute the net present value of this investment. (b) Should the machinery be purchased?
PLEASE ANSWER BOTH PARTS. I WILL COMMENT AND VOTE
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Introduction to Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
7th edition
978-1259675539, 125967553X, 978-1259594168, 1259594165, 78025796, 978-0078025792
