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
icon
Related questions
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.
Transcribed Image Text: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.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Capital Budgeting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
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