Question: Applying Time Value Factor A factory costs $793,625 . You forecast that it will produce cash inflows of $649,220 in year 1,$175,000 in year 2

Applying Time Value Factor\ A factory costs

$793,625

. You forecast that it will produce cash inflows of

$649,220

in\ year

1,$175,000

in year 2 , and

$310,000

in year 3 . The discount rate is

14.50%

.\ 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?\ (Click to select)

 Applying Time Value Factor\ A factory costs $793,625. You forecast that

Applying Time Value Factor A factory costs $793,625. You forecast that it will produce cash inflows of $649,220 in year 1,$175,000 in year 2 , and $310,000 in year 3 . The discount rate is 14.50%. a. Calculate the PV of cash inflows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. Should the company invest in the factor

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 Accounting Questions!