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Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question A factory costs $290,000. You forecast that it will produce cash inflows of $85,000 in year 1, $145,000 in year 2, and $230,000 in year 3, The discount rate is 10%. a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 10 points 8 Answer is complete but not entirely correct. Value of the factoryHRRA(79,907 21) b. Is the factory a good investment? Yes No KPrev 11 of 25 i Next >
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Answer #1

a.

value of the factory

=-290000+85000/(1+10%)^1+145000/(1+10%)^2+230000/(1+10%)^3

=79909.84

b.

yes, because NPV is higher than 0

the above is answer..

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