Question
Use interest factors (14%) to the fifth decimal place. Calculate NPV. Sales revenue $ 720,000 Costs of parts sold (325,000) Salaries, shipping, etc. (300,000) Annual
-
Use interest factors (14%) to the fifth decimal place. Calculate NPV.
| Sales revenue | $ 720,000 |
| Costs of parts sold | (325,000) |
| Salaries, shipping, etc. | (300,000) |
| Annual net cash Inflows | ? |
| Cash Flows | 14% Factor | Present Value | ||
| Investment equipment | NOW | $ (264,540) | ? | |
| Working capital needed | NOW | (125,000) | ? |
|
| Annual net cash Inflows | 1-6 | 95,000 | 3.88867 |
|
| Refurbish equipment at end of 3 years | 3 | (60,000) | .67497 | |
| Salvage value of equipment at end 6 yrs | 6 | 8,000 | .45559 |
|
| Working capital released at end of 6 years | 6 | 125,000 | ? |
|
| Net present value |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Auditing And Other Assurance Services
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Ingrid B. Splettstoesser
10th Canadian Edition
0131296159, 978-0131296152
