Juliar Inc. has provided the following data concerning a proposed investment pro

Question

Juliar Inc. has provided the following data concerning a proposed investment project: (Ignore income taxes.) Initial investment $ 130,000 Life of the project 16 years Annual net cash inflows $ 30,000 Salvage value $ 20,000 The company uses a discount rate of 7%. Click here to view Exhibit 11B-1 and Exhibit 11B-2, to determine the appropriate discount factor(s) using tables. Required: Compute the net present value of the project. (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

Explanation / Answer

Net Annual cash Inflow N $30,000 Life of the project 16 years PVIFA (7%,16)   P 9.447 Discounted (Present value of anuity) Annual Cash Inflow N*P $283,410 Add: present Value of salvage 20000*.339 6780 PVIF(7%,16) 0.339 Total Discounts cash Inflows $290,190 Less: Intial valur of Investment -130000 NPV $160,190 Ans

Related Questions

Navigate

• Browse (All)
• Browse J
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.