How do I find the net annual cash flow for this?????? Dinkel Company is consider

Question

How do I find the net annual cash flow for this??????

Dinkel Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows.

Capital investment $182,900

Annual net income:

Year 1 15,340

Year 2 15,340

Year 3 15,340

Year 4 15,340

Year 5 15,340

Total $76,700

Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)

Explanation / Answer

we distribute initial investment to each year A = 182900(0.298) = 54552 net cash flow = 54552-15340 = 39212

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