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NET PRESENT VALUE Based upon the given information, calculate the net present value of this project and determine if it should be accepted: Investment in

NET PRESENT VALUE

Based upon the given information, calculate the net present value of this project and determine if it should be accepted:

Investment in equipment ...$117,000

Net annual cash inflows.. 22,000

Working capital required. 20,000

Salvage value of equipment. 12,000

Life of project.. 10 years

Discount rate 12%

The working capital will be released at the end of the project. Should they buy this piece of equipment? SHOW WORK FOR FULL CREDIT. You may want to look at the Capital Budgeting Key Concepts document on Canvas for help. You may want to write this out and then submit as a jpeg.

Here are some present value tables you can use for this problem:

PRESENT VALUE TABLES

Present Value of $1

Periods

4%

6%

8%

10%

12%

14%

4

.855

.792

.735

.683

.636

.592

5

.822

.747

.681

.621

.567

.519

6

.790

.705

.630

.564

.507

.456

7

.760

.665

.583

.513

.452

.400

8

.731

.627

.540

.467

.404

.351

9

.703

.592

.500

.424

.361

.308

10

.676

.558

.463

.386

.322

.270

Present
Value
of

An

Annuity

Periods

4%

6%

8%

10%

12%

14%

4

3.630

3.465

3.312

3.170

3.037

2.914

5

4.452

4.212

3.993

3.791

3.605

3.433

6

5.242

4.917

4.623

4.355

4.111

3.889

7

6.002

5.582

5.206

4.868

4.564

4.288

8

6.733

6.210

5.747

5.335

4.968

4.639

9

7.435

6.802

6.247

5.759

5.328

4.946

10

8.111

7.360

6.710

6.145

5.650

5.216

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Previous Question Next Question

Periods	4%	6%	8%	10%	12%	14%
4	.855	.792	.735	.683	.636	.592
5	.822	.747	.681	.621	.567	.519
6	.790	.705	.630	.564	.507	.456
7	.760	.665	.583	.513	.452	.400
8	.731	.627	.540	.467	.404	.351
9	.703	.592	.500	.424	.361	.308
10	.676	.558	.463	.386	.322	.270

Present	Value	of	An	Annuity
Periods	4%	6%	8%	10%	12%	14%
4	3.630	3.465	3.312	3.170	3.037	2.914
5	4.452	4.212	3.993	3.791	3.605	3.433
6	5.242	4.917	4.623	4.355	4.111	3.889
7	6.002	5.582	5.206	4.868	4.564	4.288
8	6.733	6.210	5.747	5.335	4.968	4.639
9	7.435	6.802	6.247	5.759	5.328	4.946
10	8.111	7.360	6.710	6.145	5.650	5.216