Sunrise Inc. is considering a capital investment proposal that costs $227,500 and has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows: Year Net Cash Flow $97,500 80,000 3. 60,000 4. 40,000 The minimum desired rate of return for net present value analysis is 10%. The factors for the present value of $1 at the compound interest rate of 10% for 1, 2, 3, and 4 years are 0.909, 0.826, 0.751, and 0.683, respectively. Determine the net present value. Round interim answers to the nearest dollar. Enter a negative value as negative number. $4

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
Section: Chapter Questions
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Sunrise Inc. is considering a capital investment proposal that costs $227,500 and has an estimated life of 4 years and no residual value. The estimated
net cash flows are as follows:
Year
Net Cash Flow
1
$97,500
2.
80,000
3
60,000
4
40,000
The minimum desired rate of return for net present value analysis is 10%. The factors for the present value of $1 at the compound interest rate of 10%
for 1, 2, 3, and 4 years are 0.909, 0.826, 0.751, and 0.683, respectively.
Determine the net present value. Round interim answers to the nearest dollar. Enter a negative value as negative number.
Transcribed Image Text:USF x My Home CengageNOWv2 | Online teachir X agenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker =&takeAssignmentSessionLocator=&inpro... to 田 Sunrise Inc. is considering a capital investment proposal that costs $227,500 and has an estimated life of 4 years and no residual value. The estimated net cash flows are as follows: Year Net Cash Flow 1 $97,500 2. 80,000 3 60,000 4 40,000 The minimum desired rate of return for net present value analysis is 10%. The factors for the present value of $1 at the compound interest rate of 10% for 1, 2, 3, and 4 years are 0.909, 0.826, 0.751, and 0.683, respectively. Determine the net present value. Round interim answers to the nearest dollar. Enter a negative value as negative number.
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