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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
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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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.
Transcribed Image Text: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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