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to enter cengagenow h X My Home CengageNOWv2| Online teachin x signment/takeAssignmentMain.do?invoker%3D&takeAssignmentSessionLocator=&inprogress3false eBook E Calculator Boulder Creek Industries is considering an investment in equipment based on the following estimates: Cost of equipment $3,000,000 Residual value 200,000 Useful life 10 years a. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $800,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter. Net present value $ b. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value c. Determine the net present value of the equipment, assuming a desired rate of return of 15% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value d. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 12%. Round to the nearest dollar. Annual Net Cash Flow S %24 %24

to enter cengagenow h X My Home CengageNOWv2| Online teachin x signment/takeAssignmentMain.do?invoker%3D&takeAssignmentSessionLocator=&inprogress3false eBook E Calculator Boulder Creek Industries is considering an investment in equipment based on the following estimates: Cost of equipment $3,000,000 Residual value 200,000 Useful life 10 years a. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $800,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter. Net present value $ b. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value c. Determine the net present value of the equipment, assuming a desired rate of return of 15% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value d. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 12%. Round to the nearest dollar. Annual Net Cash Flow S %24 %24

FINANCIAL ACCOUNTING
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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to enter cengagenow h X My Home CengageNOWv2| Online teachin x signment/takeAssignmentMain.do?invoker%3D&takeAssignmentSessionLocator=&inprogress3false eBook E Calculator Boulder Creek Industries is considering an investment in equipment based on the following estimates: Cost of equipment $3,000,000 Residual value 200,000 Useful life 10 years a. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $800,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter. Net present value $ b. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value c. Determine the net present value of the equipment, assuming a desired rate of return of 15% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value d. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 12%. Round to the nearest dollar. Annual Net Cash Flow S %24 %24
Transcribed Image Text:to enter cengagenow h X My Home CengageNOWv2| Online teachin x signment/takeAssignmentMain.do?invoker%3D&takeAssignmentSessionLocator=&inprogress3false eBook E Calculator Boulder Creek Industries is considering an investment in equipment based on the following estimates: Cost of equipment $3,000,000 Residual value 200,000 Useful life 10 years a. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $800,000. Use the present value tables appearing in Exhibit 2 and 5 of this chapter. Net present value $ b. Determine the net present value of the equipment, assuming a desired rate of return of 12% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value c. Determine the net present value of the equipment, assuming a desired rate of return of 15% and annual net cash flows of $400,000, $600,000, and $800,000. Use the present value tables (Exhibit 2 and 5) provided in the chapter in determining your answer. If required, use the minus sign to indicate a negative net present value. Annual Net Cash Flow $400,000 $600,000 $800,000 Net present value d. Determine the minimum annual net cash flow necessary to generate a positive net present value, assuming a desired rate of return of 12%. Round to the nearest dollar. Annual Net Cash Flow S %24 %24
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