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(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

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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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
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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