Flint Company is considering investing in a new dock that will cost $760,000. The company expects to use the dock for 5 years, afterwhich it will be sold for $500,000. Flint anticipates annual cash flows of $310,000 resulting from the new dock. The company'sborrowing rate is 8%, while its cost of capital is 11%.Click here to view PV tables.Calculate the net present value of the dock. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answerto O decimal places, e.g. 5,275.)Net present value $Indicate whether Flint should make the investment.Flintshould accept682484the project.

Net Present Value (NPV) is a measure of evaluating the project. NPV is the difference between the…

Calculate the net present value of the dock. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 5,275.) Net present value $ Indicate whether Flint should make the investment. Flint should accept 682484 the project.

Calculate the net present value of the dock. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 5,275.) Net present value $ Indicate whether Flint should make the investment. Flint should accept 682484 the project.

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

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Flint Company is considering investing in a new dock that will cost $760,000. The company expects to use the dock for 5 years, after
which it will be sold for $500,000. Flint anticipates annual cash flows of $310,000 resulting from the new dock. The company's
borrowing rate is 8%, while its cost of capital is 11%.
Click here to view PV tables.
Calculate the net present value of the dock. (Use the above table.) (Round factor values to 5 decimal places, e.g. 1.25124 and final answer
to O decimal places, e.g. 5,275.)
Net present value $
Indicate whether Flint should make the investment.
Flint
should accept
682484
the project.

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