(Ignore income taxes in this problem.) Jones and Company has just purchased a ne
ID: 2371873 • Letter: #
Question
(Ignore income taxes in this problem.) Jones and Company has just purchased a new piece of equipment, the cost characteristics of which are given below:
The company uses a required rate of return of 9% and depreciates equipment using the straight-line method.
The net present value of the investment is: (Round your time value factors to 3 decimal places. Round your answer to the nearest dollar amount.)
(Ignore income taxes in this problem.) Jones and Company has just purchased a new piece of equipment, the cost characteristics of which are given below:
Explanation / Answer
The net present value of the investment is:
= 9800PVIFA(9%,13)-50700
=9800*7.487 -50700
=$22,672.60
=$22,673
The simple rate of return for the investment (rounded to the nearest tenth of a percent) is:=9800/50700= 19.33%
11
The net present value of the investment is:
= 9800PVIFA(9%,13)-50700
=9800*7.487 -50700
=$22,672.60
=$22,673
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