Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Platoon Company is performing a post-audit of a project that was estimated to cost $420,000, have a useful life of 6 years with a zero

Platoon Company is performing a post-audit of a project that was estimated to cost $420,000, have a useful life of 6 years with a zero salvage value, and result in net cash inflows of $100,000 per year. After the investment was in operation for a year, revised figures indicate that it actually cost $470,000, will have a 9-year useful life, and will produce net cash inflows of $77,000. The present value of an annuity of 1 for 6 years at 10% is 4.355 and for 9 years is 5.759.

Calculate the net present value based on the original estimates. Net present value =

Determine whether the project should have been accepted.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting A Smart Approach

Authors: Mary Carey, Cathy Knowles

4th Edition

0198844808, 9780198844808

More Books

Students also viewed these Accounting questions

Question

I had a problem last week; they would think I am picky or a whiner!

Answered: 1 week ago