Question

The following data are accumulated by California Hat Company in evaluating the purchase of $400,000 of equipment, having a four-year useful life:


a. Assuming that the desired rate of return is 20%, determine the net present value for the proposal. Use the table of the present value of $1 appearing in Exhibit 1 of this chapter.
b. Would management be likely to look with favor on the proposal?Explain.


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  • CreatedMarch 11, 2014
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