Vaughn Company has the following information about a potential
capital investment:
Initial investment | $ | 310,000 |
Annual cash inflow | $ | 75,000 |
Expected life | 7 years | |
Cost of capital | 14% | |
1. Calculate the net present value of this
project. (Future Value of $1, Present Value of $1, Future Value
Annuity of $1, Present Value Annuity of $1.) (Use
appropriate factor(s) from the tables provided. Round the final
answer to nearest whole dollar.)
|
1) | |||||||
intital investment | -310,000 | ||||||
Present value of annual cash flow (75000*4.288)= | 321600 | ||||||
net present value | 11600 | ||||||
(use factors as given in your question - use PV of $1 ordinary annuity | |||||||
table at 14% for 7 years) | |||||||
Vaughn Company has the following information about a potential capital investment: Initial investment $ 310,000 Annual...
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