Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sunland Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $221,000, would have

image text in transcribed
Sunland Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost $221,000, would have a useful life of 9 years and zero salvage value, and would result in net annual cash flows of $44,200 per year. Now that the investment has been in operation for 1 year, revised figures indicate that it actually cost $229,000, will have a total useful life of 11 years (including the year just completed), and will produce net annual cash flows of $37,800 per year. Click here to view the factor table. Evaluate the success of the project. Assume a discount rate of 12%. (ff the net present value is negative, use elther a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answers to 0 decimal places, eg. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Original estimate net present value Revised estimate net present value The project a success

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

Step: 3

blur-text-image

Ace Your Homework with AI

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

Get Started

Students also viewed these Accounting questions