Question
Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. The investment costs $57,600 and
Peng Company is considering an investment expected to generate an average net income after taxes of $2,900 for three years. The investment costs $57,600 and has an estimated $9,000 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. Round your present value factor to 4 decimals.)
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. Round your present value factor to 4 decimals.) Cash Flow Select Chart Amount X PV Factor = Present Value Annual cash flow = $ 0 Residual value 0 Net present valueStep by Step Solution
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