Question
Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. Assume Park
Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. Assume Park Co. requires a 10% return on its investments. 1-a. What is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) 1-b. Based on NPV alone, should Park Co. invest? Complete this question by entering your answers in the tabs below. Required 1ARequired 1B What is the net present value of this investment? Cash Flow Select Chart Amount x PV Factor = Present Value Annual cash flow Present Value of an Annuity of 1 $9,000 x 3.3872 = $30,485 Immediate cash outflows Net present value Required 1A Required 1ARequired 1B Based on NPV alone, should Park Co. invest? Based on NPV alone, should Park Co. invest?
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