FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Pahy is considering the purchase of...
Poe Company is considering the purchase of new equipment costing $80,000. The projected annual cash inflows are $30,200, to be received at the end of each yea
machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of $1 and present value of an
annuity for different periods are presented below. Compute the net present value of the machine (rounded to the nearest whole dollar).
Periods
1
2
3
4
Present Value
of $1 at 10%
0.9091
0.8264
0.7514
0.6830
Present Value of an
Annuity of $1 at 10%
0.9091
1.7355
2.4869
3.1699
Help
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Transcribed Image Text:Pahy is considering the purchase of... Poe Company is considering the purchase of new equipment costing $80,000. The projected annual cash inflows are $30,200, to be received at the end of each yea machine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of $1 and present value of an annuity for different periods are presented below. Compute the net present value of the machine (rounded to the nearest whole dollar). Periods 1 2 3 4 Present Value of $1 at 10% 0.9091 0.8264 0.7514 0.6830 Present Value of an Annuity of $1 at 10% 0.9091 1.7355 2.4869 3.1699 Help
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