! Required information Use the following information for the Quick Study below. (Algo) [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 $ (320,000) 180,000 118,000 111,000 QS 24-20 (Algo) Net present value with uneven cash flows and salvage value LO P3 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $31,500 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 Present Value of Net Factor Cash Flows

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A9

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Required information
Use the following information for the Quick Study below. (Algo)
[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
$ (320,000)
180,000
118,000
111,000
QS 24-20 (Algo) Net present value with uneven cash flows and salvage
value LO P3
Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of
$31,500 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 Present Value of Net
Factor
Cash Flows
Transcribed Image Text:! Required information Use the following information for the Quick Study below. (Algo) [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 $ (320,000) 180,000 118,000 111,000 QS 24-20 (Algo) Net present value with uneven cash flows and salvage value LO P3 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $31,500 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 Present Value of Net Factor Cash Flows
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