Instructions: Find the Net Present Value for each item below. Also, indicate whether the potential investment...
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Instructions: Find the Net Present Value for each item below. Also, indicate whether the potential investment is Occeptable or unacceptable. 1. Madison Company is analyzing a potential investment using the following data: a. Cost of Asset: $150,000 b. Annual Cash Flow: $20,000 c. Discount (Hurdle) Rate: 11% d. Salvage Value: $5,000 e. Estimated Life: 6 years Present Value of Cash Outflow: Present Value of Cash Inflows: Net Present Value Results: Instructions: Find the Net Present Value for each item below. Also, indicate whether the potential investment is Occeptable or unacceptable. 1. Madison Company is analyzing a potential investment using the following data: a. Cost of Asset: $150,000 b. Annual Cash Flow: $20,000 c. Discount (Hurdle) Rate: 11% d. Salvage Value: $5,000 e. Estimated Life: 6 years Present Value of Cash Outflow: Present Value of Cash Inflows: Net Present Value Results:
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Solution Present value of cash outflows is 150000 Present value of inflows annual cash flow... View the full answer
Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
Posted Date:
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