Question
Hewlett Company is considering the following investment: Estimated capital investment $220,000 Estimated useful life 3 years Estimated disposal value in 3 years $10,000 Estimated annual
Hewlett Company is considering the following investment:
Estimated capital investment $220,000
Estimated useful life 3 years
Estimated disposal value in 3 years $10,000
Estimated annual savings in cash operating costs(end of year) $120,000
Minimum desired rate of return 12%
Present value of ordinary annuity of one, 3 periods at 12% 2.4018
Present value of one, 3 periods at 12% 0.7118
Assume straight-line depreciation is used. Ignore income taxes. The net present value of the investment is____. SHOW WORK
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Acca Financial Reporting Practice And Revision Kit
Authors: BPP Learning Media
1st Edition
1509738053, 978-1509738052
