Please Solve In 20mins Bonita Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost$249,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $45,800 per year. Nowthat the investment has been in operation for 1 year, revised figures indicate that it actually cost $260,000, will have a total useful lifeof 11 years (including the year just completed), and will produce net annual cash flows of $39.200 per year. Click here to view PV table.Evaluate the success of the project. Assume a discount rate of 10%. (If the net present value is negative, use either a negative sign precedingthe number eg -45 or parentheses eg (45). Round present value answers to O decimal places, eg. 125. For calculation purposes, use 5 decimalplaces as displayed in the factor table provided.)Original estimate net present value24Revised estimate net present value%24The projecta success.

NPV= present value of cash flow- Intial Investment when the NPV is greater than $ 0 , accept the…

19,000, would have a useful life o at the investment has been in ope 11 years (including the year just c raluate the success of the project. e number eg -45 or parentheses eg aces as displayed in the factor table

19,000, would have a useful life o at the investment has been in ope 11 years (including the year just c raluate the success of the project. e number eg -45 or parentheses eg aces as displayed in the factor table

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Please Solve In 20mins

Bonita Company is performing a post-audit of a project completed one year ago. The initial estimates were that the project would cost
$249,000, would have a useful life of 9 years, zero salvage value, and would result in net annual cash flows of $45,800 per year. Now
that the investment has been in operation for 1 year, revised figures indicate that it actually cost $260,000, will have a total useful life
of 11 years (including the year just completed), and will produce net annual cash flows of $39.200 per year. Click here to view PV table.
Evaluate the success of the project. Assume a discount rate of 10%. (If the net present value is negative, use either a negative sign preceding
the number eg -45 or parentheses eg (45). Round present value answers to O decimal places, eg. 125. For calculation purposes, use 5 decimal
places as displayed in the factor table provided.)
Original estimate net present value
24
Revised estimate net present value
%24
The project
a success.

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