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Required information (The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after
Required information (The following information applies to the questions displayed below.] Peng Company is considering an investment expected to generate an average net income after taxes of $2,200 for three years. The investment costs $55,200 and has an estimated $7,200 salvage value. Assume Peng requires a 5% 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 Select Chart Amount x PV Factor Present Value $ 0 11 Annual cash flow = Il 0 Residual value Net present value
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