Shields Company has gathered the following data on a proposed investment project

Question

Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.)

The net present value on this investment is closest to: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.)

Shields Company has gathered the following data on a proposed investment project: (Ignore income taxes.) Click here to view Exhibit 13B-2 to determine the appropriate discount factor(s) using tables. The net present value on this investment is closest to: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.) $88,000 $39,328 $84,750 $630,000

Explanation / Answer

discount factor for annuity, 15 years, 10% = 7.606
88,000*7.606 = 669,328

net present value = 669,328 - 630,000 = 39,328

answer: 39,328

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