Required information [The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year 3 $ (380,000) 195,000 94,000 113,000 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $33,000 at the end of its three-year life. Compute the machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Year 1 Year 2 Year 3 Year 3 salvage value Totals Initial investment Net present value Net Cash Flows Present Value Factor Present Value of Net Cash Flows $ $ 0 0

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Required information
[The following information applies to the questions displayed below.]
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company
requires a 6% return from its investments.
Initial investment
Net cash flows:
Year 1
Year 2
Year 3
$ (380,000)
195,000
94,000
113,000
Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $33,000 at the end of its three-year
life. Compute the machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.)
Year 1
Year 2
Year 3
Year 3 salvage value
Totals
Initial investment
Net present value
Net Cash
Flows
Present Value
Factor
Present Value of Net
Cash Flows
$
$
0
0
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year 3 $ (380,000) 195,000 94,000 113,000 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $33,000 at the end of its three-year life. Compute the machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Year 1 Year 2 Year 3 Year 3 salvage value Totals Initial investment Net present value Net Cash Flows Present Value Factor Present Value of Net Cash Flows $ $ 0 0
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