Required information [The following information applies to the questions displayed below.] Montego Production Company is considering an investment in new machinery for its factory. Various information about the proposed investment follows: Initial investment Useful life Salvage value Annual net income generated Montego's cost of capital Assume straight line depreciation method is used. $ 860,000 6 years $ 20,000 $ 66,000 11% Help Montego evaluate this project by calculating each of the following: Required: 4. Recalculate Montego's NPV assuming its cost of capital is 12 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. Net Present Value
Required information [The following information applies to the questions displayed below.] Montego Production Company is considering an investment in new machinery for its factory. Various information about the proposed investment follows: Initial investment Useful life Salvage value Annual net income generated Montego's cost of capital Assume straight line depreciation method is used. $ 860,000 6 years $ 20,000 $ 66,000 11% Help Montego evaluate this project by calculating each of the following: Required: 4. Recalculate Montego's NPV assuming its cost of capital is 12 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) Note: Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. Net Present Value
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Provide required 4 answer
![Required information
[The following information applies to the questions displayed below.]
Montego Production Company is considering an investment in new machinery for its factory. Various information about the
proposed investment follows:
Initial investment
Useful life
Salvage value
Annual net income generated
Montego's cost of capital
Assume straight line depreciation method is used.
$ 860,000
6 years
$ 20,000
$ 66,000
11%
Help Montego evaluate this project by calculating each of the following:
Required:
4. Recalculate Montego's NPV assuming its cost of capital is 12 percent. (Future Value of $1, Present Value of $1, Future Value Annuity
of $1, Present Value Annuity of $1.)
Note: Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round your
answer to 2 decimal places.
Net Present Value](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa0579ea0-442b-4233-b2f7-bc05c484c134%2F1e227a5f-1325-4557-a5f1-2d1cbeb56952%2Fd7q2ru8_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Montego Production Company is considering an investment in new machinery for its factory. Various information about the
proposed investment follows:
Initial investment
Useful life
Salvage value
Annual net income generated
Montego's cost of capital
Assume straight line depreciation method is used.
$ 860,000
6 years
$ 20,000
$ 66,000
11%
Help Montego evaluate this project by calculating each of the following:
Required:
4. Recalculate Montego's NPV assuming its cost of capital is 12 percent. (Future Value of $1, Present Value of $1, Future Value Annuity
of $1, Present Value Annuity of $1.)
Note: Use appropriate factor(s) from the tables provided. Negative amount should be indicated by a minus sign. Round your
answer to 2 decimal places.
Net Present Value
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