Question: A factory costs $ 9 8 7 , 0 0 0 . You forecast that i t will produce cash inflows o f $ 8

A factory costs $987,000. You forecast that it will produce cash inflows of $892,649in
year 1, $125,000in year 2, and $180,000in year 3. The discount rate is19.50%.
a. Calculate the PVof cash inflows. (Do not round intermediate calculations. Round
your answer to2 decimal places.)
Present
value
b. Should the company invest in the factor?
A factory costs $987,000. 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!

Q:

2 21-39 Replacement of a machine, income taxes, sensitivity. (CMA, adapted) The Kuhl Brothers own a frozen custard ice cream shop. The brothers currently are using a machine that has been in use for...

Q:

I need a half page executive summary about the mixed plan below. An Executive Summary explaining your mixed plan in the context of the other three plans and constraints given. Include the recommended...

Q:

View Policies Current Attempt in Progress The following transactions have taken place for Crown Point Corporation. The company has a December 31 fiscal year end and Crown Point does not maintain a...

Q:

Following are the marginal abatement costs of three firms, related to the quantity of emissions. Each firm is now emitting 10 tons/week, so total emissions are 30 tons/week. Suppose we wish to reduce...

Q:

Please help with these Capsim Production numbers. I believe 6-15 is good how it currently is. 1-5 I am not sure how to get the production schedule numbers, please show your work. Eat=Traditonal,...

Q:

Question (1) - 30 points 1.1-Follow the steps explained in class 13-adjusted Forecasting and calculate a sales forecast for product Asese in the high Tech segment in 2024 (show the difference between...

Q:

Which description best fits Andrews? For clarity: - A differentiator competes through good designs, high awareness, and easy accessibility. - A cost leader competes on price by reducing costs and...

Q:

The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summary of the sources and uses of cash (sources of cash are added, uses of...

Q:

Last year, Baldwin Corp paid their workers $26.81 per hour. How much will they be paying them 2 rounds from then? Select: 1 $31.04 $29.56 $28.29 $28.15 COMP-XM INQUIRER Page 1 Front Page Page 2...

Q:

The Baldwin's workforce complement will grow by 20% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Baldwin spends...

Q:

It is January 2nd and senior management of Baldwin meets to determine their investment plan for the year. They decide to fully fund a plant and equipment purchase by issuing 75,000 shares of stock...

Q:

At December 31, 2014, the trading securities for Storrer, Inc. are as follows. Instructions (a) Prepare the adjusting entry at December 31, 2014, to report the securities at fair value. (b) Show the...

Q:

On 31 December 2015, Allegro Berhad acquired 75% of the 3 million RM1 ordinary shares of Vivace Berhad for a consideration of RM2,850,000. At that date, Vivace Berhad's retained profit was RM448,000....

Q:

In Gary M . Schwarz et al . v . Commissioner, how did the U . S . Tax Court decide whether farming and holding land could be considered a single activity? It referenced a test in the regulations that...

Q:

A company issues 1,050 shares of its common stock for $33,600 cash. Prepare journal entries to record this event under each of the following separate situations.