Question
Time Creations purchased new equipment with a cost of $215,000. This equipment is expected to last 5 years and generate the following net cash inflows:
Time Creations purchased new equipment with a cost of $215,000. This equipment is expected to last 5 years and generate the following net cash inflows:
Yr 1 $80,000
Yr 2 $60,000
Yr 3 $60,000
Yr 4 $30,000
Yr 5 $20,000
The equipment has an expected resale value of $40,000 at the end of the 5 years. The company has a required rate of return of 12% on all investments.
What is the net present value of the new equipment? AND, was this an advisable investment?
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Stats Data And Models
Authors: Richard D. De Veaux, Paul D. Velleman, David E. Bock
4th Edition
321986490, 978-0321989970, 032198997X, 978-0321986498
