Quiz Chapter 25 Required information Use the following information for the Quick

Question

Quiz Chapter 25 Required information Use the following information for the Quick Study below. IThe following information applies to the questions displayed belowJ Park Co. is considering an investment that requires immediate payment of $26,945 and provides expected cash inflows of $8,500 annually for four years. If Park Co. requires a 7% return on its investments. QS 25-2 Net present value LO P3 1-a. What is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use approprlate factor(s) from the tables provided. Round your present value factor to 4 decimals.) Cash Flow Select Chart Amount x PV FactorPresent Value Annual cash flow Net present value

Explanation / Answer

Calculate net present value :

Cash flow Amount * PV factor = Present value Annual cash inflow 8500 * 3.3872 = 28791.20 Initial investment 26945 * 1 = -26945 Net present value 1846.20

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