cure Ihttps.//newconnect.mheducation.com/flow/connect.htm Required Informatlon S

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cure Ihttps.//newconnect.mheducation.com/flow/connect.htm Required Informatlon SB Helicopter Gear is planning to expand its... The following information applies to the questions displayed belowj Helicopter Gear is planning to expand its product line. which requires investment of $477,000 in special-purpose machinery. The machinery has a useful life of six years and no salvage value. The estimated annual results of offering the new products are as follows: Revenuie Expenses (Including straight-line depreciation) Increase in net income 529,5e0 582,880) $ 26, 7ee All revenue from the new products and all expenses (except depreciation) will be received or paid in cash in the same period as recognized for accounting purposes MC Qu. 66 Compute the net present value of this... Compute the net present value of this proposed investment, using a discount rate of 11% (An annuity table shows that the present value of $1 received a Mumple Choice $27668

Explanation / Answer

Net present value = Present value of cash inflow-Present value of cash outflow

Annual cash inflow = 26700+(477000/6) = 106200

Net present value = (106200*4.231)-477000 = -27668

so answer is a) -27668

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