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v com rn takeAssignment takeAssignmentMain doinvoker= assignments&takeAssignment

ID: 2410874 • Letter: V

Question

v com rn takeAssignment takeAssignmentMain doinvoker= assignments&takeAssignment; essionLocators assignment take& Net Present Value Method The following data are accumulated by Paxton Company in evaluating the purchase of $168,900 of equipment, having a four-year useful life Net Income Net Cash Flow $69,000 53,000 40,000 27,000 Year 1 $41,000 25,000 12,000 (1,000) Year 2 Year 3 60y% 10% 1296 0.943 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.6270.4670.404 0.327 0.233 0.592 0.424 0.361 .284 0.194 0.558 0.386 0.322 0.247 0.162 0.909 0.893 0.870 10

Explanation / Answer

a.

Working:

Present value of net cash flow 149489 Amount to be invested 168900 Net Present Value -19411