Question
Garcia Company is considering a $360,000 investment with the following net cash flows. Garcia requires a 10% return on its investments. The present value of
Garcia Company is considering a $360,000 investment with the following net cash flows. Garcia requires a 10% return on its investments. The present value of this investment is:
| Annual Net Cash Flows | Present Value of $1 at 10% | |
|---|---|---|
| Initial investment | 1.0000 | |
| Year 1 | $ 120,000 | 0.9091 |
| Year 2 | 80,000 | 0.8264 |
| Year 3 | 140,000 | 0.7513 |
| Year 4 | 250,000 | 0.6830 |
| Year 5 | 70,000 | 0.6209 |
Multiple Choice
-
$494,599.
-
$178,062.
-
$134,599.
-
$243,691.
-
$305,349.
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Accounting What the Numbers Mean
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,
9th Edition
978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062
