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Question 2 (5 points) You have been consulted to advice JJJ Corporation on the projected acquisition of another production line costing P1 million. The line has an expected useful life of 5 years without any salvage value. The company's hurdle rate is 20% and the information below were made available to you. Year Estimated Annual Present Value Cash Flow of P1 at 20% 1 600,000 0.91 2 300,000 0.76 3 200,000 0.63 4 200,000 0.53 5 200,000 0.44 1,500,000 3.27 Assuming that the cash flow is generated evenly during the year, Compute for the Net Present Value and your advice would be

Question 2 (5 points) You have been consulted to advice JJJ Corporation on the projected acquisition of another production line costing P1 million. The line has an expected useful life of 5 years without any salvage value. The company's hurdle rate is 20% and the information below were made available to you. Year Estimated Annual Present Value Cash Flow of P1 at 20% 1 600,000 0.91 2 300,000 0.76 3 200,000 0.63 4 200,000 0.53 5 200,000 0.44 1,500,000 3.27 Assuming that the cash flow is generated evenly during the year, Compute for the Net Present Value and your advice would be

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 2 (5 points) You have been consulted to advice JJJ Corporation on the projected acquisition of another production line costing P1 million. The line has an expected useful life of 5 years without any salvage value. The company's hurdle rate is 20% and the information below were made available to you. Year Estimated Annual Present Value Cash Flow of P1 at 20% 1 600,000 0.91 2 300,000 0.76 3 200,000 0.63 200,000 0.53 200,000 0.44 1,500,000 3.27 Assuming that the cash flow is generated evenly during the year, Compute for the Net Present Value and your advice would be
Transcribed Image Text:Question 2 (5 points) You have been consulted to advice JJJ Corporation on the projected acquisition of another production line costing P1 million. The line has an expected useful life of 5 years without any salvage value. The company's hurdle rate is 20% and the information below were made available to you. Year Estimated Annual Present Value Cash Flow of P1 at 20% 1 600,000 0.91 2 300,000 0.76 3 200,000 0.63 200,000 0.53 200,000 0.44 1,500,000 3.27 Assuming that the cash flow is generated evenly during the year, Compute for the Net Present Value and your advice would be
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