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Peng Company is considering an investment expected to generate an average net income after taxes of $2,200 for three years. The investment costs $58,200 and
Peng Company is considering an investment expected to generate an average net income after taxes of $2,200 for three years. The investment costs $58,200 and has an estimated $7,200 salvage value. Assume Peng requires a 10% return on its investments. Compute the net present value of this investment. Assume the company uses straight-line depreciation. (PV of $1. FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign.) Cash Flow Annual cash flow Residual value Select Chart Net present value Amount x PV Factor Present Value $ O O ould be indicated by a minus sign.) iow e Select Chart Amount x Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 OW Immediate cash outflows Net present value/ Present value of cash inflows
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