Question
Required information [The following information applies to the questions displayed below.] Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to
Required information
[The following information applies to the questions displayed below.] Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial tour business. Various information about the proposed investment follows:
Initial investment | $ | 270,000 | |||||
Useful life | $ | 10 | years | ||||
Salvage value | 25,000 | ||||||
Annual net income generated | $ | 6,000 | |||||
FCA's cost of capital | 8 | % | |||||
Assume straight line depreciation method is used.
4. Help FCA evaluate this project by calculating each of the following: Recalculate FCA's NPV assuming the cost of capital is 3 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Round your final answer to the nearest whole dollar amount.)
Net Present Value ______________
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