3) The installation of compressor is estimated to generate the following net cash flows. The effective...
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3) The installation of compressor is estimated to generate the following net cash flows. The effective date of the evaluation is May 1, 1984. The projections shown are based on a calendar year: Year 1(8 months) Cash flow $ 8000 2 6000 3 5000 4 2000 a- Using mid-period discounting find the present worth of the net cash flow as of May 1,1984 at 18% compounded annually. b- If your company has a time value of money of 18% (nominal annual- Compounded annually) should you recommend the compressor installation if it will cost $ 16500 (on May 1, 1984)? 3) The installation of compressor is estimated to generate the following net cash flows. The effective date of the evaluation is May 1, 1984. The projections shown are based on a calendar year: Year 1(8 months) Cash flow $ 8000 2 6000 3 5000 4 2000 a- Using mid-period discounting find the present worth of the net cash flow as of May 1,1984 at 18% compounded annually. b- If your company has a time value of money of 18% (nominal annual- Compounded annually) should you recommend the compressor installation if it will cost $ 16500 (on May 1, 1984)?
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Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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