Question: A factory costs $ 5 3 1 , 3 2 0 . You forecast that it will produce cash inflows of $ 3 8 1

A factory costs $531,320. You forecast that it will produce cash inflows of $381,599 in year 1,$225,000 in year 2, and $270,000 in year 3. The discount rate is 11.50%.
a. Calculate the PV of cash inflows. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Present value
b. Should the company invest in the factor?
 A factory costs $531,320. You forecast that it will produce cash

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!