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Hello, all three problems are in relatedness of each other, I can not seem to get the correct present value of 1 at 6%. QS
Hello, all three problems are in relatedness of each other, I can not seem to get the correct present value of 1 at 6%.
QS 24-17 Computation of break-even time LO A1 Heels, a shoe manufacturer, is evaluating the costs and benefits of new equipment that would custom fit each pair of athletic shoes. The customer would have his or her foot scanned by digital computer equipment; this information would be used to cut the raw materials to provide the customer a perfect fit. The new equipment costs $98,000 and is expected to generate an additional $55,000 in cash flows for 5 years. A bank will make a $98,000 loan to the company at a 10% interest rate for this equipment's purchase. Use the following table to determine the break-even time for this equipment. All cash flows occur at year-end. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Cumulative net cash outflows must be entered with a minus sign. Round your present value factor to 4 decimals. Round your answers to whole dollars. Round "Break even time" answer to 1 decimal place.) Chart Values are Based on: % Year Cash Inflow (Outflow) PV Factor Present Value Cumulative Present Value of Inflow (Outflow) 0 $ 1.0000 = $ (98,000) 55,000 (98,000) $ 55,000 (98,000) (55,000) 1 = 2 3 4 5 Required information Use the following information for the Quick Study below. [The following information applies to the questions displayed below.] Following is information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 6% return from its investments. Investment Al $(340,000) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 140,000 140,000 81,000 QS 24-12 Net present value, with salvage value LO P3 Assume that instead of a zero salvage value, as shown above, the investment has a salvage value of $31,000. Compute the investment's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places.) Cash Flow Present Value of 1 at 6% Present Value Year 1 $ Year 2 140,000 140,000 81,000 361,000 Year 3 Totals $ $ 0 Amount invested Net present value $ 0 Following is information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 6% return from its investments. Investment Al $(340,000) Initial investment Expected net cash flows in: Year 1 Year 2 Year 3 140,000 140,000 81,000 QS 24-11 Net present value LO P3 Compute this investment's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places.) Cash Flow Present Value of 1 at 6% Present Value $ Year 1 Year 2 Year 3 Totals Amount invested Net present value 140,000 140,000 81,000 361,000 $ $ (340,000) (340,000) $Step by Step Solution
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