Required information [The following information applies to the questions displayed below] Project Y requires a $307,500 Investment for new machinery with a five-year life and no salvage value. The project yields the following annual results. Cash flows occur evenly within each year. (PV of $1. FV of $1. PVA of $1. and FVA of $1 Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Determine Project Y's net present value using 7% as the discount rate Project Y $ 370,000 165,760 61,500 26,000 $ 116,740

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Required Information
[The following information applies to the questions displayed below.]
Project Y requires a $307,500 Investment for new machinery with a five-year life and no salvage value. The project ylelds
the following annual results. Cash flows occur evenly within each year. (PV of $1. FV of $1. PVA of $1. and FVA of $1)
Note: Use appropriate factor(s) from the tables provided.
Annual Amounts
Sales of new product
Expenses
Materials, labor, and overhead (except depreciation)
Depreciation Machinery
Selling, general, and administrative expenses
Income
Years 1-5
4. Determine Project Y's net present value using 7% as the discount rate.
Note: Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest
whole dollar.
Net present value
Net Cash Flows
x
Present Value
of Annuity at =
7%
Project Y
$ 370,000
=
165,760
61,500
26,000
$116,740
Present Value of Net
Cash Flows
$
Transcribed Image Text:Required Information [The following information applies to the questions displayed below.] Project Y requires a $307,500 Investment for new machinery with a five-year life and no salvage value. The project ylelds the following annual results. Cash flows occur evenly within each year. (PV of $1. FV of $1. PVA of $1. and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Annual Amounts Sales of new product Expenses Materials, labor, and overhead (except depreciation) Depreciation Machinery Selling, general, and administrative expenses Income Years 1-5 4. Determine Project Y's net present value using 7% as the discount rate. Note: Do not round intermediate calculations. Round your present value factor to 4 decimals and final answers to the nearest whole dollar. Net present value Net Cash Flows x Present Value of Annuity at = 7% Project Y $ 370,000 = 165,760 61,500 26,000 $116,740 Present Value of Net Cash Flows $
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