A factory costs $555,925 You forecast that it will produce cash inflows of $269,402 in year 1, $135,000 in year 2, and $270,000 in year 3 The discount rate is 6 00 a Calculate the PV of cash inflows (Do not round intermediate calculations Round your answer to 2 decimal places ) Present value $ b Sh...

To calculate the present value PV of the cash inflows we need to discount each cash inflow to its pr ...

A factory costs $555,925. You forecast that it will produce cash inflows of $269,402 in year 1,

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A factory costs $555,925. You forecast that it will produce cash inflows of $269,402 in year 1, $135,000 in year 2, and $270,000 in year 3. The discount rate is 6.00%.

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?

Related Book For answer-question

Fundamentals of Corporate Finance

ISBN: 978-1259024962

6th Canadian edition

Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim

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Posted Date: Feb 29, 2024 11:29 PM

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A factory costs $555,925. You forecast that it will produce cash inflows of $269,402 in year 1,

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To calculate the present value PV of the cash inflows we need to discount each cash inflow to its pr... View the full answer

Fundamentals of Corporate Finance

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