A factory costs $980,000. You reckon that it will produce an inflow after operating costs of $188,000 a year for 10 years. a. If the opportunity cost of capital is 12%, what is the net present value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places. b. What will the factory be worth at the end of six years? ( 2 decimal places.

A factory costs $980,000. You reckon that it will produce an inflow after operating costs of $188,000 a year for 10 years. a. If the opportunity cost of capital is 12%, what is the net present value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places. b. What will the factory be worth at the end of six years? ( 2 decimal places.

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Description: A factory costs $980,000. You reckon that it will produce an inflow after operating costs of $188,000 a year for 10 years. a. If the opportunity cost of capital is 12%, what is the net present value of the factory? (Do not round intermediate calculat

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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