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 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $27,000 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 $ $ (290,000) 105,000 92,000 115,000 0 Present Value Factor < Prev Present Value of Net Cash Flows $ $ 0 0 S 10 of 16 www www Next >
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 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $27,000 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 $ $ (290,000) 105,000 92,000 115,000 0 Present Value Factor < Prev Present Value of Net Cash Flows $ $ 0 0 S 10 of 16 www www Next >
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
Related questions
Question
Assume that instead of a zero salvage value as shown above the machines has a salvage value if $27,000 at the end of its three year life.
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Required information
[The following information applies to the questions displayed below.]
Initial investment
Net cash flows:
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.
Year 1
Year 2
Year 3
Year 1
Year 2
Year 3
Year 3 salvage value
Totals
Initial investment
Net present value
Net Cash
Flows
Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $27,000 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.)
$
O
i
$ (290,000)
105,000
92,000
115,000
0
Present Value
Factor
BP T
< Prev
Saved
Present Value of Net
Cash Flows
$
$
FIS
0
1'
0
S
10 of 16
H
‒‒‒
Help Save & Ex
L
Next >
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Transcribed Image Text:gnment i
ch
!
Required information
[The following information applies to the questions displayed below.]
Initial investment
Net cash flows:
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.
Year 1
Year 2
Year 3
Year 1
Year 2
Year 3
Year 3 salvage value
Totals
Initial investment
Net present value
Net Cash
Flows
Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $27,000 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.)
$
O
i
$ (290,000)
105,000
92,000
115,000
0
Present Value
Factor
BP T
< Prev
Saved
Present Value of Net
Cash Flows
$
$
FIS
0
1'
0
S
10 of 16
H
‒‒‒
Help Save & Ex
L
Next >
76°F Sunn
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