Pablo Company is considering buying a machine that will yield income of $2,000 and net cash flow of $16,300 per year for three years. The machine costs $54,900 and has an estimated $12,000 salvage value. Pablo requires a 5% return on its investments. Compute the net present value of this investment. (PV of $1. EV of $1, PVA of $1, and EVA of S1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your present value factor to 4 decimals.) Net Cash Flows xPV Factor Years 1-3 Totals Net present value . Present Value of Net Cash Flows
Pablo Company is considering buying a machine that will yield income of $2,000 and net cash flow of $16,300 per year for three years. The machine costs $54,900 and has an estimated $12,000 salvage value. Pablo requires a 5% return on its investments. Compute the net present value of this investment. (PV of $1. EV of $1, PVA of $1, and EVA of S1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your present value factor to 4 decimals.) Net Cash Flows xPV Factor Years 1-3 Totals Net present value . Present Value of Net Cash Flows
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
a
Transcribed Image Text:Pablo Company is considering buying a machine that will yield income of $2,000 and net cash flow of $16,300 per year for three
years. The machine costs $54,900 and has an estimated $12,000 salvage value. Pablo requires a 5% return on its investments.
Compute the net present value of this investment. (PV of $1. FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the
tables provided. Negative amounts should be indicated by a minus sign. Round your present value factor to 4 decimals.)
Years 1-3
Totals
Net present value
Net Cash Flows
xPV Factor
"
Present Value of
Net Cash Flows
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education