Required information (The following information applies to the questions displayed below] A local farming company is considering an investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating Income in each of five years as follows: Sales Variable expenses $2,867,000 1,125,000 Contribution margin 1,742,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $706,000 571,000 Total fixed expenses Net operating income 1,277,000 $ 465,000 Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.) Present value
Required information (The following information applies to the questions displayed below] A local farming company is considering an investment in equipment with a useful life of five years and no salvage value. The company's discount rate is 14%. The project would provide net operating Income in each of five years as follows: Sales Variable expenses $2,867,000 1,125,000 Contribution margin 1,742,000 Fixed expenses: Advertising, salaries, and other fixed out-of-pocket costs Depreciation $706,000 571,000 Total fixed expenses Net operating income 1,277,000 $ 465,000 Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table. What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.) Present value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Required information
(The following information applies to the questions displayed below]
A local farming company is considering an investment in equipment with a useful life of five years and no salvage value.
The company's discount rate is 14%. The project would provide net operating Income in each of five years as follows:
Sales
Variable expenses
$2,867,000
1,125,000
Contribution margin
1,742,000
Fixed expenses:
Advertising, salaries, and other fixed
out-of-pocket costs
Depreciation
$706,000
571,000
Total fixed expenses
Net operating income
1,277,000
$ 465,000
Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table.
What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.)
Present value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd37bdf62-bbe2-4ade-9eb2-63b936e196ae%2F1e7ad3f5-1547-4035-96b0-a8b0e6506538%2F78im4jg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
(The following information applies to the questions displayed below]
A local farming company is considering an investment in equipment with a useful life of five years and no salvage value.
The company's discount rate is 14%. The project would provide net operating Income in each of five years as follows:
Sales
Variable expenses
$2,867,000
1,125,000
Contribution margin
1,742,000
Fixed expenses:
Advertising, salaries, and other fixed
out-of-pocket costs
Depreciation
$706,000
571,000
Total fixed expenses
Net operating income
1,277,000
$ 465,000
Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using table.
What is the present value of the project's annual net cash inflows? (Round your final answer to the nearest whole dollar amount.)
Present value
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