Question

Required information [The following information applies to the questions displayed below) A company is investing in a solar panel system to reduce its electricity costs. The system requires a ay. The system is expected to generate net cash flows of $10,615 per year for the next 35 years. The investment has zero salvage value. The company requires an 7% return on its investments. 1-a. Compute the net present value of this investment (PV of $1. FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) Chart Values are Based on: Select Chart Amount x PV Factor - Present Value Cash Flow Annual cash flow Net present value 1-b. Should the project be accepted? O Yes O No

Answer 1

Answer is given below

	Cash Flow		Amount	X	PV Factor	=	Present Value
	Annual Cash flow	Present Value of Cash inflows	$10,615.00		12.9477		$137,439.54
		Immediate Cash outflows					$112,174.60
		Net Present Value					$25,264.94
	Project should be accepted since Net present value is positive