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Lindas Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows: Initial investment (2 limos) $ 840,000
Lindas Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment follows:
Initial investment (2 limos) | $ | 840,000 | |||||
Useful life | 10 | years | |||||
Salvage value | $ | 120,000 | |||||
Annual net income generated | 70,560 | ||||||
LLTs cost of capital | 14 | % | |||||
3. Net present value. (Future Value of $1. Present Value of $1 Future Value Annuity f $1 Present Value Annuity of $1. Use appropriate factor s from the tables provided. Do not round intermediate calculations. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount.) Table or Calculator Function resent Value of $1 Cash Outflow (Beginning of the Year) 840,000 14 % Present Value 840,000 Table or Calculator Function resent Value Annuity of $1 Cash Infiow (for Next 10 Years) 142.560 10 141% Table Factor 5.2161 Present Value Table or Calculator Function Present Value of $1 Cash Infiow (for 10th Year) 120,000 10 i= Table Factor 0.2697 Present Value Total Net Present Value 3. Net present value. (Future Value of $1. Present Value of $1 Future Value Annuity f $1 Present Value Annuity of $1. Use appropriate factor s from the tables provided. Do not round intermediate calculations. Cash Outflows and negative amounts should be indicated by a minus sign. Round your "Present Values" to the nearest whole dollar amount.) Table or Calculator Function resent Value of $1 Cash Outflow (Beginning of the Year) 840,000 14 % Present Value 840,000 Table or Calculator Function resent Value Annuity of $1 Cash Infiow (for Next 10 Years) 142.560 10 141% Table Factor 5.2161 Present Value Table or Calculator Function Present Value of $1 Cash Infiow (for 10th Year) 120,000 10 i= Table Factor 0.2697 Present Value Total Net Present Value
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