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need help with this question Vaughn Corporation is reviewing an investment proposal. The initial cost is $106,000. Estimates of the book value of the investment
need help with this question
Vaughn Corporation is reviewing an investment proposal. The initial cost is $106,000. Estimates of the book value of the investment at the end of each year, the net cash flows for each year, and the ne income for each year are presented in the schedule below. All cash flows are assumed to take place at the end of the year. The salvage value of the investment at the end of each year is assumed to equal its book value. There would be no salvage value at the end of the investment's life. Year 1 2 NM + LD Investment Proposal Book Annual Annual Value Cash Flows Net Income $69,300 $44,100 $7,400 42,600 40,300 13,600 20,000 36,000 13,400 6,500 29,800 16,300 0 24,700 18,200 Vaughn Corporation uses an 11% target rate of return for new investment proposals. Click here to view PV table. (a) What is the cash payback period for this proposal? (Round answer to 2 decimal places, e.g. 10.50.) Cash payback period years (b) What is the annual rate of return for the investment? (Round answer to 2 decimal places, e.g. 10.50%.) Annual rate of return for the investment (c) What is the net present value of the investment? (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses eg (45). Round answer to o decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present valueStep by Step Solution
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