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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
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 $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Assume Peng requires a 15% 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. Round your present value factor to 4 decimals.) Cash Flow Select Chart Amount x PV FactorPropent Value Annual cash flow Residual value Net present value
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