Requirement 1-a
Cash flow |
Select Chart |
Amount |
x |
PV Factor |
= |
Present Value |
Annual Cash flow |
11800.00 |
x |
3.545951 |
= |
$ 41,842.22 |
|
Initial Outflow |
$ 32,500.00 |
|||||
Net present value |
$ 9,342.22 |
Net present value may differ a little due to rounding off of PV factor. Please use the PV factor given to you in the table as you did not provide me the table.
Requirement 1-b
Answer- Yes
Company should invest as the present value is positive.
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