# Question

Refer to the information in QS and instead assume the investment has a salvage value of \$20,000. Compute the investment’s net present value.
In QS Following is information on an investment considered by Hudson Co. The investment has zero salvage value. The company requires a 12% return from its investments. Compute this investment’s net present value.
Investment A1
Initial investment . . . . . . . . . . . . . . . . . . (\$200,000)
Expected net cash flows in year:
1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,000

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