A company is considering a $177,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. (PV of $1, FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net Cash Flow (a) Compute the net present value of this investment. (b) Should the machinery be purchased? Required A Required B Year 1 $11,000 Year Complete this question by entering your answers in the tabs below. Year 1 Year 2 Year 3 Year 4 Year 5 Year 2 $30,000 Totals Initial investment Net present value Compute the net present value of this investment. (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Net Cash Flows Year 3 $58,000 Present Value Factor Year 4 $44,000 Present Value of Net Cash Flows Year 5 $119,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

H2.

Account 

A company is considering a $177,000 investment in machinery with the following net cash flows. The company requires a 10% return
on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
Net Cash Flow
(a) Compute the net present value of this investment.
(b) Should the machinery be purchased?
Required A Required B
Year
Year 1
$11,000
Complete this question by entering your answers in the tabs below.
Year 1
Year 2
Year 3
Year 4
Year 5
Year 2
$30,000
Totals
Initial investment
Net present value
Compute the net present value of this investment. (Round your present value factor to 4 decimals. Round your final answers
to the nearest whole dollar.)
Net Cash
Flows
Year 3
$58,000
Present Value
Factor
Year 4
$44,000
Present Value of
Net Cash Flows
Year 5
$119,000
Transcribed Image Text:A company is considering a $177,000 investment in machinery with the following net cash flows. The company requires a 10% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.) Net Cash Flow (a) Compute the net present value of this investment. (b) Should the machinery be purchased? Required A Required B Year Year 1 $11,000 Complete this question by entering your answers in the tabs below. Year 1 Year 2 Year 3 Year 4 Year 5 Year 2 $30,000 Totals Initial investment Net present value Compute the net present value of this investment. (Round your present value factor to 4 decimals. Round your final answers to the nearest whole dollar.) Net Cash Flows Year 3 $58,000 Present Value Factor Year 4 $44,000 Present Value of Net Cash Flows Year 5 $119,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education