(a) Compute the net present value of this investment. (b) Should the investment be accepted or rejected on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. (Round your present value factor to 4 decimals and othe the nearest whole dollar.) Years 1 through 10 Initial investment Net present value Annual Net Cash Flows S X 131,200 x Present Value of Annuity at 9% Present Value of Net Cash Flows S Required B > 0
(a) Compute the net present value of this investment. (b) Should the investment be accepted or rejected on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of this investment. (Round your present value factor to 4 decimals and othe the nearest whole dollar.) Years 1 through 10 Initial investment Net present value Annual Net Cash Flows S X 131,200 x Present Value of Annuity at 9% Present Value of Net Cash Flows S Required B > 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
am.133.
Transcribed Image Text:equipment costs $380,800 and has a 10-year life and no salvage value. BZB Company requires at least an 9% return on th
investment. The expected annual income for each year from this equipment follows: (PV of $1. EV of $1. PVA of $1, and EVA
appropriate factor(s) from the tables provided.)
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Equipment
Selling, general, and administrative expenses
Income
(a) Compute the net present value of this investment.
(b) Should the investment be accepted or rejected on the basis of net present value?
Complete this question by entering your answers in the tabs below.
Required A Required B
Compute the net present value of this investment. (Round your present value factor to 4 decimals and other final answers to
the nearest whole dollar.).
Years 1 through 10
Initial investment
Net present value
Annual Net Cash
Flows
$
131,200 x
$ 218,000
83,000
38,080
23,800
$93,120
Required A
Present
Value of
Annuity at
9%
Present Value
of Net Cash
Flows
Required B >
0
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