Homework Answers
Solution:
| Computation of NPV of Investment - Engineering Corp. | ||||
| Particulars | Amount | Period | PV Factor (12%) | Present Value |
| Cash Outflows: | ||||
| Cost of Equipment | $16,000.00 | 0 | 1 | $16,000 |
| Present Value of Cash Outflows (A) | $16,000 | |||
| Cash Inflows: | ||||
| Annual cash inflows | $3,000.00 | 1-5 | 3.604776 | $10,814 |
| Salvage value | $4,000.00 | 5 | 0.567427 | $2,270 |
| Present Value of Cash Inflows (B) | $13,084 | |||
| Net Present Value (B-A) | -$2,916 | |||
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