Vanessa Company is evaluating a project requiring a capital expenditure of $480,000 The project has an estimated life of 4 years and no salvage value The estimated net income and cash flow from the project are as follows Company 's minimum desired rate or return foe net present value analysis is 15...

Dep using SLN 4800004 120000 So OCF for Y 1 210000 120000 ...

Vanessa Company is evaluating a project requiring a capital expenditure of $480,000. The project has an estimated

Question:

Vanessa Company is evaluating a project requiring a capital expenditure of $480,000. The project has an estimated life of 4 years and no . The estimated net income and cash flow from the project are as follows.

Company's minimum desired rate or return foe net present value analysis is 15 %. The present value of the $1 at compound interest of 15% for 1,2,3,4 years is .870 .756 .658 and .572. Determine the average rate of return on investment using straight line method and net present value

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important... Compound Interest
Compound interest (or compounding interest) is interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods on a deposit or loan. Thought to have originated in 17th century Italy, compound...