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Zoey Company is considering purchasing new equipment that costs $740,000. Its management estimates that the equipment will generate cash inflows as follows: Year 1 2
Zoey Company is considering purchasing new equipment that costs $740,000. Its management estimates that the equipment will generate cash inflows as follows: Year 1 2 $202,000 202,000 264,000 264,000 152,000 4 Present value of $1 6% 7% 5% 5% 10% 2 3 4 0.943 0.890 0.840 0.792 0.747 0.935 0.873 0.816 0.763 0.713 0.926 0.857 0.794 0.735 0.681 0.917 0.842 0.772 0.708 0.650 0.909 0.826 0.751 0.683 0.621 The company's required rate of retum is 10%. Using the factors in the table below, calculate the present value of the cash inflows. (Round all calculations to the nearest whole dollar.) O A. $823,438 B. $812,859 O C. $824,571 O D. $808,714
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