Question

(Q2) Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $215,000, net...

(Q2) Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $215,000, net annual cash flows $40,000, present value factor of cash inflows for 10 years 5.65 (rounded) (per Table 4 AppendixG).

Determine the net present value, and indicate whether the investment should be made.

Homework Answers

Answer #1
Year Cash Flow PVF Discounted cash flow
0                2,15,000 1          (2,15,000)
1-10                    40,000 5.65      2,26,000
NPV                11,000
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