E11-3 Calculating Net Present Value, Internal Rate of Return [LO 11-3, 11-4] Ass

Question

E11-3 Calculating Net Present Value, Internal Rate of Return [LO 11-3, 11-4]

Assume straight line depreciation method is used.

  

Calculate the project’s net present value. Assume straight line depreciation method is used. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided.)

    

   

Calculate the net present value using a 14 percent discount rate. Assume straight line depreciation method is used. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided.)

  

Initial investment $ 600,000   Annual net income $ 60,000   Expected life 8 years   Salvage value $ 70,000   Merrill’s cost of capital 7 %

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E11-3 Calculating Net Present Value, Internal Rate of Return [LO 11-3, 11-4] Ass

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