Homework Answers
|
Net present value |
$1478 |
|
Year(s) |
Amount of Cash Flow |
16% Factor |
Present value of cash flows |
|
|
Equipment |
Now |
(104000) |
1.000 |
(104000) |
|
Working capital required |
Now |
(50800) |
1.000 |
(50800) |
|
Building rent |
1-6 |
(25200) |
3.685 |
(92862) |
|
Annual net cash inflow |
1-6 |
60800 |
3.685 |
224048 |
|
Salvage value, equipment |
6 |
10400 |
0.410 |
4264 |
|
Release of working capital |
6 |
50800 |
0.410 |
20828 |
|
Net present value |
$1478 |
Annual net cash inflow = 92000-31200 = 60800
Salvage value, equipment = 104000*10% = 10400
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