costs $350,000. You A factory costs forecast that it will produce cash inflows of $75,000 in year 1, $135,000 in year 2, and $210,000 in year 3. The discount rate is 11%. a) Calculate the Present Value of cash inflows. b) Is the factory a good investment? Yes or No?

costs $350,000. You A factory costs forecast that it will produce cash inflows of $75,000 in year 1, $135,000 in year 2, and $210,000 in year 3. The discount rate is 11%. a) Calculate the Present Value of cash inflows. b) Is the factory a good investment? Yes or No?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

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Question

Need help with this accounting question

costs
$350,000. You
A factory costs
forecast that it will produce cash
inflows of $75,000 in year 1, $135,000
in year 2, and $210,000 in year 3. The
discount rate is 11%.
a) Calculate the Present Value of
cash inflows.
b) Is the factory a good investment?
Yes or No?

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