avis Chili Company is considering an investment of $37,000, which produces the following inflows: ear Cash Flow $17,000 2 3 13,000 se Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. Determine the net present value of the project based on a zero percent discount rate. Net present value

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
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Davis Chili Company is considering an investment of $37,000, which produces the following inflows:
Year Cash Flow
$17,000
16, 000
13,000
1
2
Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a. Determine the net present value of the project based on a zero percent discount rate.
Net present value
b. Determine the net present value of the project based on a 10 percent discount rate. (Do not round intermediate calculations and
round your answer to 2 decimal places.)
Net present value
c. Determine the net present value of the project based on a 16 percent discount rate. (Negative amount should be indicated by a
minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.)
Net present value
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Transcribed Image Text:Davis Chili Company is considering an investment of $37,000, which produces the following inflows: Year Cash Flow $17,000 16, 000 13,000 1 2 Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Determine the net present value of the project based on a zero percent discount rate. Net present value b. Determine the net present value of the project based on a 10 percent discount rate. (Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value c. Determine the net present value of the project based on a 16 percent discount rate. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value < Prev 5 of 6 Next >
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