The following present value factors are provided for use in this problem. Present Value Present Value of an Periods 1 of $1 at 8% Annuity of $1 at 8% 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Company wants to purchase an asset for $36,800 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 $11,800 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)? Multiple Choice О $2,283. О $3,018. О $(3,018). $(2,283). О $39,818.
The following present value factors are provided for use in this problem. Present Value Present Value of an Periods 1 of $1 at 8% Annuity of $1 at 8% 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Company wants to purchase an asset for $36,800 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 $11,800 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)? Multiple Choice О $2,283. О $3,018. О $(3,018). $(2,283). О $39,818.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following present value factors are provided for use in this problem.
Present Value
Present Value of an
Periods
1
of $1 at 8%
Annuity of $1 at 8%
0.9259
0.9259
2
0.8573
1.7833
3
0.7938
2.5771
4
0.7350
3.3121
Xavier Company wants to purchase an asset for $36,800 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 $11,800 in each of the four years. What is the machine's net
present value (round to the nearest whole dollar)?
Multiple Choice
О
$2,283.
О
$3,018.
О
$(3,018).
$(2,283).
О
$39,818.
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