FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Pena Company is considering an investment of $27,215 that provides net cash flows of $8,400 annually for four years.

(a) If Pena Company requires a 8% return on its investments, what is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)
(b) Based on net present value, should Pena Company make this investment?

Required A
Required B
What is the net present value of this investment?
Present Value of
Net Cash Flows
Net Cash Flows x
PV Factor
Years 1-4
$
Net present value
%24
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Transcribed Image Text:Required A Required B What is the net present value of this investment? Present Value of Net Cash Flows Net Cash Flows x PV Factor Years 1-4 $ Net present value %24
Required A
Required B
Based on net present value, should Pena Company make this investment?
Based on net present value, should Pena Company make this investment?
expand button
Transcribed Image Text:Required A Required B Based on net present value, should Pena Company make this investment? Based on net present value, should Pena Company make this investment?
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