Question

Quail Company invests $46,000 today, it can expect to receive $13,600 at the end of each year for the next seven years, plus an extra $6,800 at the end of the seventh year. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Enter negative net present values, if any, as negative values. Round your present value factor to 4 decimals.) What is the net present value of this investment assuming a required 10% return on investments? Chart Values are Based on: n- Cash Flow Select Chart Amount PV Factor Present Value $ 0 Annual cash flow Additional cash flow 0 Net present value

Answer 1

Ans:

Cash Flow	Select Chart	Amount	PVF	Present Value
Annual Cash Flow	PV of Annuity of 1	13,600.00	4.8684	66,210.24
Residual Value	PV of 1	6,800.00	0.5132	3,489.76
	PV of Cash Inflows			69,700.00
	Immediate Cash outflows			46,000.00
	Net Present Value			23,700.00

Time	PVF@10%
1.00	0.9091
2.00	0.8264
3.00	0.7513
4.00	0.6830
5.00	0.6209
6.00	0.5645
7.00	0.5132
Annuity of PV for 7 years	4.8684

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