The Libby & Lacy Company is considering a new construction project for the new manufacturing plant and ask you to calculate a Net Present Value analysis. The investment for the land parcel is $235,000. The manufacturing plant will be completed at the end of year 1 and costs $388,000. The company expects to increase revenue for the next ten years, : (Yr 1) $225,000, (Yr 2) $328,000, (Yr 3) $164,000, (Yr 4) $143,000, (Yr 5) $116,000, (Yr 6) $110,000, (Yr 7) $95,000, (Yr 8) 74,000, (Yr 9) $40,000, and (Yr 10) $15,000. The roadway to the plant will need to be repaved twice and will cost: (Yr 4) $38,000, and (Yr 8) $67,000. The fixed manufacturing overhead for the company will cost an additional $44,000 each year for the 10 years. Prepare a Net Present Value table using a 12% factor.

The Libby & Lacy Company is considering a new construction project for the new manufacturing plant and ask you to calculate a Net Present Value analysis. The investment for the land parcel is $235,000. The manufacturing plant will be completed at the end of year 1 and costs $388,000. The company expects to increase revenue for the next ten years, : (Yr 1) $225,000, (Yr 2) $328,000, (Yr 3) $164,000, (Yr 4) $143,000, (Yr 5) $116,000, (Yr 6) $110,000, (Yr 7) $95,000, (Yr 8) 74,000, (Yr 9) $40,000, and (Yr 10) $15,000. The roadway to the plant will need to be repaved twice and will cost: (Yr 4) $38,000, and (Yr 8) $67,000. The fixed manufacturing overhead for the company will cost an additional $44,000 each year for the 10 years. Prepare a Net Present Value table using a 12% factor.

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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