Quall Company is considering buying a food truck that will yield net cash inflows of $10,200 per year for seven years. The truck costs $47,000 and has an estimated $6,800 salvage value at the end of the seventh year (PV of $1. EV of $1. PVA of $1, and EVA of $1 Note: Use appropriate factor(s) from the tables provided. Enter negative net present values, if any, as negative values. Round your present value factor to 4 decimals. What is the net present value of this investment assuming a required 12% return? Years 1-7 Year 7 salvage Net Cash Flows 3 $ 10.200 x 6.800x PV Factor 04030 . Present Value of Net Cash Flows $ 4,120 0
Quall Company is considering buying a food truck that will yield net cash inflows of $10,200 per year for seven years. The truck costs $47,000 and has an estimated $6,800 salvage value at the end of the seventh year (PV of $1. EV of $1. PVA of $1, and EVA of $1 Note: Use appropriate factor(s) from the tables provided. Enter negative net present values, if any, as negative values. Round your present value factor to 4 decimals. What is the net present value of this investment assuming a required 12% return? Years 1-7 Year 7 salvage Net Cash Flows 3 $ 10.200 x 6.800x PV Factor 04030 . Present Value of Net Cash Flows $ 4,120 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
DO NOT GIVE SOLUTION IN IMAGE
Transcribed Image Text:QS 11-16 (Algo) Net present value of annuity and salvage value LO P3
Quall Company is considering buying a food truck that will yield net cash inflows of $10.200 per year for seven years. The truck costs
$47,000 and has an estimated $6,800 salvage value at the end of the seventh year (PV of $1. EV of $1. PVA of $1. and FVA of $1)
Note: Use appropriate factor(s) from the tables provided. Enter negative net present values, If any, as negative values. Round your
present value factor to 4 decimals.
What is the net present value of this investment assuming a required 12% return?
Years 1-7
Year 7 salvage
Totals
Initial investment
Net present value
Net Cash Flows
S
S
10.200 x
6,800x
PV Factor
0.4030-
..
Present Value of
Net Cash Flows
$
4,120
0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
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