QI/ Ipswich Corporation is considering an investment opportunity with the expected net cash inflows of $300,000 for four years. The residual value of the investment, at the end of four years, would be $70,000. The company uses a discount rate of 14%, and the initial investment is $290,000. Calculate the NPV of the investment. Present value of an ordinary annuity of $1: 12% 13% 14% 15% 1 0.893 0.885 0.877 0.87 2 1.69 1.668 1.647 1.626 3 2.402 2.361 2.322 2.283 4 3.037 2.974 2.914 2.855 3.605 3.517 3.433 3.352 Present value of $1: 12% 13% 14% 15% 1 0.893 0.885 0.877 0.87 2 0.797 0.783 0.769 0.756 0.712 0.693 0.675 0.658 4. 0.636 0.613 0.592 0.572 0.567 0.543 0.519 0.497
QI/ Ipswich Corporation is considering an investment opportunity with the expected net cash inflows of $300,000 for four years. The residual value of the investment, at the end of four years, would be $70,000. The company uses a discount rate of 14%, and the initial investment is $290,000. Calculate the NPV of the investment. Present value of an ordinary annuity of $1: 12% 13% 14% 15% 1 0.893 0.885 0.877 0.87 2 1.69 1.668 1.647 1.626 3 2.402 2.361 2.322 2.283 4 3.037 2.974 2.914 2.855 3.605 3.517 3.433 3.352 Present value of $1: 12% 13% 14% 15% 1 0.893 0.885 0.877 0.87 2 0.797 0.783 0.769 0.756 0.712 0.693 0.675 0.658 4. 0.636 0.613 0.592 0.572 0.567 0.543 0.519 0.497
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Q1/ Ipswich Corporation is considering an investment opportunity with the expected net cash
inflows of $300,000 for four years. The residual value of the investment, at the end of four years,
would be $70,000. The company uses a discount rate of 14%, and the initial investment is
$290,000. Calculate the NPV of the investment.
Present value of an ordinary annuity of $1:
12%
13%
14%
15%
1.
0.893
0.885
0.877
0.87
2.
1.69
1.668
1.647
1.626
2.402
2.361
2.322
2.283
4
3.037
2.974
2.914
2.855
3.605
3.517
3.433
3.352
Present value of $1:
12%
13%
14%
15%
0.893
0.885
0.877
0.87
2.
0.797
0.783
0.769
0.756
0.712
0.693
0.675
0.658
4
0.636
0.613
0.592
0.572
0.567
0.543
0.519
0.497](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F254d18ee-d285-4c47-89b8-fa472ee0cd0b%2Fa52d2d17-8057-4284-81ce-917888377c90%2Fb8gwpbj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q1/ Ipswich Corporation is considering an investment opportunity with the expected net cash
inflows of $300,000 for four years. The residual value of the investment, at the end of four years,
would be $70,000. The company uses a discount rate of 14%, and the initial investment is
$290,000. Calculate the NPV of the investment.
Present value of an ordinary annuity of $1:
12%
13%
14%
15%
1.
0.893
0.885
0.877
0.87
2.
1.69
1.668
1.647
1.626
2.402
2.361
2.322
2.283
4
3.037
2.974
2.914
2.855
3.605
3.517
3.433
3.352
Present value of $1:
12%
13%
14%
15%
0.893
0.885
0.877
0.87
2.
0.797
0.783
0.769
0.756
0.712
0.693
0.675
0.658
4
0.636
0.613
0.592
0.572
0.567
0.543
0.519
0.497
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