NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question. Particulars Amount ($) Cash out flows 2,975,000 (-) Salvage value 300,000 Initial Investment 2,675,000 The project’s NPV would be lower or higher, when salvage is $300,000.

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Answer 1

Question

Chapter 12, Problem 11F15

To determine

NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question.

Particulars Amount ($)
Cash out flows 2,975,000
(-) Salvage value 300,000
Initial Investment 2,675,000

The project’s NPV would be lower or higher, when salvage is $300,000.

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Answer 2

Question

Chapter 12, Problem 11F15

To determine

NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question.

Particulars Amount ($)
Cash out flows 2,975,000
(-) Salvage value 300,000
Initial Investment 2,675,000

The project’s NPV would be lower or higher, when salvage is $300,000.

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Answer 3

Question

Chapter 12, Problem 11F15

To determine

NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question.

Particulars Amount ($)
Cash out flows 2,975,000
(-) Salvage value 300,000
Initial Investment 2,675,000

The project’s NPV would be lower or higher, when salvage is $300,000.

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Answer 4

Question

Chapter 12, Problem 11F15

To determine

NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question.

Particulars Amount ($)
Cash out flows 2,975,000
(-) Salvage value 300,000
Initial Investment 2,675,000

The project’s NPV would be lower or higher, when salvage is $300,000.

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Answer 5

Chapter 12, Problem 11F15

To determine

NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question.

Particulars Amount ($)
Cash out flows 2,975,000
(-) Salvage value 300,000
Initial Investment 2,675,000

The project’s NPV would be lower or higher, when salvage is $300,000.

Answer 6

Chapter 12, Problem 11F15

To determine

NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question.

Particulars Amount ($)
Cash out flows 2,975,000
(-) Salvage value 300,000
Initial Investment 2,675,000

The project’s NPV would be lower or higher, when salvage is $300,000.

Answer 7

Chapter 12, Problem 11F15

To determine

NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question.

Particulars Amount ($)
Cash out flows 2,975,000
(-) Salvage value 300,000
Initial Investment 2,675,000

The project’s NPV would be lower or higher, when salvage is $300,000.

Answer 8

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Answer 9

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Answer 10

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Answer 11

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Solution Summary: The author explains that NPV is computed by deducting initial investment amount from the present value.

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Chapter 12 Solutions

Particulars	Amount ($)
Cash out flows	2,975,000
(-) Salvage value	300,000
Initial Investment	2,675,000