Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 9% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year 3 Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Year 1 Year 2 Year 3 Totals Initial investment Net present value $ (370,000) 105,000 114,000 103,000 Net Cash Flow Present Value Factor Present Value of Net Cash Flows
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 9% return from its investments. Initial investment Net cash flows: Year 1 Year 2 Year 3 Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.) Year 1 Year 2 Year 3 Totals Initial investment Net present value $ (370,000) 105,000 114,000 103,000 Net Cash Flow Present Value Factor Present Value of Net Cash Flows
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Required information
[The following information applies to the questions displayed below.]
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company
requires a 9% return from its investments.
Initial investment
Net cash flows:
Year 1
Year 2
Year 3
Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.)
Year 1
Year 2
Year 3
Totals
Initial investment
Net present value
$ (370,000)
105,000
114,000
103,000
Net Cash Flow
Present Value
Factor
Present Value of Net
Cash Flows](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa331f5d3-d99c-40ee-9abe-64c3e0869912%2Fd1d62f54-e599-49c2-8bf5-d2491223b175%2Fr1buiah_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company
requires a 9% return from its investments.
Initial investment
Net cash flows:
Year 1
Year 2
Year 3
Compute this machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.)
Year 1
Year 2
Year 3
Totals
Initial investment
Net present value
$ (370,000)
105,000
114,000
103,000
Net Cash Flow
Present Value
Factor
Present Value of Net
Cash Flows
Transcribed Image Text:Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $20,500 at the end of its three-year
life. Compute the machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables
provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar.)
Year 1
Year 2
Year 3
Year 3 salvage value
Totals
Initial investment
Net present value
Net Cash
Flows
Present Value
Factor
Present Value of Net
Cash Flows
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