Question
The Sheffield Company is planning to purchase $476,000 of equipment with an estimated 7-year life and no estimated salvage value. The company has projected the
The Sheffield Company is planning to purchase $476,000 of equipment with an estimated 7-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment:
| Year | Projected Cash Flows | |||
|---|---|---|---|---|
| 1 | $247,000 | |||
| 2 | 135,000 | |||
| 3 | 121,000 | |||
| 4 | 58,800 | |||
| 5 | 67,100 | |||
| 6 | 41,400 | |||
| 7 | 40,600 | |||
| Total | $710,900 |
Click here to view the factor table. Calculate the net present value of the proposed equipment purchase. Sheffield uses a 7% discount rate. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to 0 decimal place, e.g. 58,971.)
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Fundamental Accounting Principles
Authors: John Wild, Ken Shaw, Barbara Chiappetta
22nd edition
9781259566905, 978-0-07-76328, 77862279, 1259566900, 0-07-763289-3, 978-0077862275
