Wayne Company is considering a long-term investment project called ZIP. ZIP will

Question

Wayne Company is considering a long-term investment project called ZIP. ZIP will require an investment of $122,228. It will have a useful life of 4 years and no salvage value. Annual cash inflows would increase by $79,800, and annual cash outflows would increase by $39,900. The company's required rate of return is 11%. Click here toviewPV table. Calculate the net present value on this project. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). Round present value answer to 0 decimal places, e.g. 125. For calculation purposes, use 5 decimal places as displayed in the factor table provided.) Net present value Whether this project should be accepted? The project should b rejected accepted LINK TO TEXT

Explanation / Answer

Net annual cash flows = 79800-39900= $39900 Net present value = (39900*3.10245)-122228= $1560 The project should be accepted

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