[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 QS 11-20 (Algo) Net present value with uneven cash flows and salvage value LO P3 $ (220,000) 175,000 128,000 89,000 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $20,500 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 Factor Present Value of Net Cash Flows
[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 QS 11-20 (Algo) Net present value with uneven cash flows and salvage value LO P3 $ (220,000) 175,000 128,000 89,000 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $20,500 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 Factor Present Value of Net Cash Flows
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 4MAD
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![[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
QS 11-20 (Algo) Net present value with uneven cash flows and salvage value LO P3
$ (220,000)
175,000
128,000
89,000
Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $20,500 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 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F54a221a2-e802-426b-b767-276968f73d19%2F1d96e421-4eb2-4fc0-9bc1-08e3f32fadf7%2Fh7d2tae_processed.png&w=3840&q=75)
Transcribed Image Text:[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
QS 11-20 (Algo) Net present value with uneven cash flows and salvage value LO P3
$ (220,000)
175,000
128,000
89,000
Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $20,500 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 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
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