Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. (Round each present value calculation to the nearest dollar.)
Peng Company is considering an investment expected to generate an average net income after taxes of $1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Assume Peng requires a 15% return on its investments. Compute the net present value of this investment. (Round each present value calculation to the nearest dollar.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Peng Company is considering an investment expected to generate an average net income after taxes of
$1,950 for three years. The investment costs $45,000 and has an estimated $6,000 salvage value. Assume
Peng requires a 15%
each present value calculation to the nearest dollar.)
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