Question

Required information Use the following information for the Quick Study below. The following information applies to the questions displayed below) Following is information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 3 return from its investments. Investment $ (320,000) Initial Investment Expected not canh flows in your 155,000 120.000 91,000 QS 24-12 Net present value, with salvage value LO P3 Assume that instead of a zero salvage value, as shown above, the investment has a salvage value of $28,500. Compute the investment's net present value. (PV of $1, FV of $1, PVA of S1, and FVA of $1 (Use appropriate factoris) from the tables provided. Round all present value factors to 4 decimal places.) Cash Flow Present Value of 1 Present Value at 3% Year 1 Year 2 Year 3 Totals Amount invested Net present valve

Answer 1

NET PRESENT VALUE Present value of Year Cash flows 1 at 3% Present Value 155000 0.9709 150490 120000 0.9426 113112 119500 0.9151 109354 Totals 394500 372956 Amount to be invested 320000 Net present Value = 52956 2 3