Question
In 6 years, Hopkins Company plans to receive $12,400 cash from the sale of a machine that has a $5,800 book value. Year FV of
In 6 years, Hopkins Company plans to receive $12,400 cash from the sale of a machine that has a $5,800 book value.
| Year | FV of $1 at 8% | FV of an ordinary annuity at 8% | PV of $1 at 8% | PV of an ordinary annuity at 8% | |||||||||||
| 1 | 1.080 | 1.000 | 0.926 | 0.926 | |||||||||||
| 2 | 1.166 | 2.080 | 0.857 | 1.783 | |||||||||||
| 3 | 1.260 | 3.246 | 0.794 | 2.577 | |||||||||||
| 4 | 1.360 | 4.506 | 0.735 | 3.312 | |||||||||||
| 5 | 1.469 | 5.867 | 0.681 | 3.993 | |||||||||||
| 6 | 1.587 | 7.336 | 0.630 | 4.623 | |||||||||||
If the firm is subject to a 30% income tax rate and has a(n) 8% after-tax hurdle rate, the correct discounted net cash flow would be:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Accounting Information Systems
Authors: Steven M. Bragg
2nd Edition
164221079X, 9781642210798
