Chapter $11.$ Homework

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QS $11-14($Algo$)$ Net present value of an annuity LO P$3$

$8$ points

Pena Company is considering an investment of $$26,120$ that provides net cash flows of $$8,600$ annually for four years.

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$($a$)$ If Pena Company requires a $10\%$ return on its investments, what is the net present value of this investment?

$($PV of $$1,FV$ of $$1,$ PVA of $$1,$ and FVA of $$1)$

Note: Use appropriate factor$($s$)$ from the tables provided. Round your present value factor to $4$ decimals.

$($b$)$ Based on net present value, should Pena Company make this investment?

Hint

Complete this question by entering your answers in the tabs below.

References

Required $A$

Required $B$

What is the net present value of this investment?

$\backslash$table$[[,$Net Cash Flows,$x,$PV Factor,$\{$fc$89$c$9727-$d$97$c$-4139-870$c$-$c$84$b$989$c$61$f$5\}$

$\backslash$table$[[$Present Value of$],[$Net Cash Flows$]]],[$Years $1-4,,,=$$$,],[,,=,,],[$Net present value,,,,$]]$