Jesse is the fnancial advisor for his company and is considering the purchase of excavation equipment...

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Jesse is the fınancial advisor for his company and is considering the purchase of excavation equipment which will cost $71,000. The purchase of this equipment is expected to save his company $7,523 at the end of every year for 11 years. At the end of the 11 years, he expects the excavation equipment to have a residual (inflow) value of $12,700. The company requires a 4.7% rate of return. Round PV to the nearest cent. Round NPV to the nearest whole number. 1) What is the Net Present Value (NPV) of this equipment investment? Cash Inflows Cash Inflows Residual Payments (Savings) (Inflow) P/Y = %3D C/Y = N I/Y = % % %3D $ $ $ PV = PMT = FV $ (If the NPV is negative, enter it as a negative number. If the NPV is zero, enter 0.) NPV = $ %3D 2) Should this equipment purchase be made according to the NPV criterion? Yes No Jesse is the fınancial advisor for his company and is considering the purchase of excavation equipment which will cost $71,000. The purchase of this equipment is expected to save his company $7,523 at the end of every year for 11 years. At the end of the 11 years, he expects the excavation equipment to have a residual (inflow) value of $12,700. The company requires a 4.7% rate of return. Round PV to the nearest cent. Round NPV to the nearest whole number. 1) What is the Net Present Value (NPV) of this equipment investment? Cash Inflows Cash Inflows Residual Payments (Savings) (Inflow) P/Y = %3D C/Y = N I/Y = % % %3D $ $ $ PV = PMT = FV $ (If the NPV is negative, enter it as a negative number. If the NPV is zero, enter 0.) NPV = $ %3D 2) Should this equipment purchase be made according to the NPV criterion? Yes No

Answer rating: 100% (QA)

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