Question
The following present value factors are provided for use in this problem. Periods Present Value of $1 at 8% Present Value of an Annuity of
The following present value factors are provided for use in this problem.
| Periods | Present Value of $1 at 8% | Present Value of an Annuity of $1 at 8% |
|---|---|---|
| 1 | 0.9259 | 0.9259 |
| 2 | 0.8573 | 1.7833 |
| 3 | 0.7938 | 2.5771 |
| 4 | 0.7350 | 3.3121 |
Cliff Company wants to purchase an asset for $40,000 but needs to earn a return of 8%. The expected year-end net cash flows are $12,000 in each of the first three years, and $16,000 in the fourth year. The machine is expected to have no salvage value at the end of it's useful life. What is the machine's net present value (round to the nearest whole dollar)?
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Financial And Managerial Accounting
Authors: Jan R. Williams, Joseph V. Carcello, Mark S. Bettner, Sue Haka, Susan F. Haka
14th International Edition
0071101217, 9780071101219
