The following present value factors are provided for use in this problem. Periods 1 2 3 4 Present Value Present Value of an of $1 at 8% Annuity of $1 at 8% 0.9259 0.9259 0.8573 0.7938 0.7350 1.7833 2.5771 3.3121 Xavier Company wants to purchase an asset for $37,300 with a four-year life and a $1,000 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $12,300 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)?
The following present value factors are provided for use in this problem. Periods 1 2 3 4 Present Value Present Value of an of $1 at 8% Annuity of $1 at 8% 0.9259 0.9259 0.8573 0.7938 0.7350 1.7833 2.5771 3.3121 Xavier Company wants to purchase an asset for $37,300 with a four-year life and a $1,000 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $12,300 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)?
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
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Transcribed Image Text:The following present value factors are
provided for use in this problem.
Periods
1
2
3
4
Present Value
Present Value of an
of $1 at 8% Annuity of $1 at 8%
0.9259
0.9259
0.8573
0.7938
0.7350
1.7833
2.5771
3.3121
Xavier Company wants to purchase an
asset for $37,300 with a four-year life and a
$1,000 salvage value. Xavier requires an
8% return on investment. The expected
year-end net cash flows are $12,300 in
each of the four years. What is the
machine's net present value (round to the
nearest whole dollar)?
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