Problema company is considering a proposal to invest 30000, Ask an Expert

Accounting

Problem:

A company is considering a proposal to invest $30,000 in a project that would provide the following net cash flows:

Year 1 $6,500

Year 2 $10,700

Year 3 $15,000

Year 4 $12,800

Required:

Question 1: What is the project's payback period?

Question 2: Compute the net present value of the project assuming a 10% discount rate with the following factors: PV factors for $1(yr 1: 0.9091; yr 2: 0.8264; yr 3:0 .7513; yr 4: 0.6830)

Question 3: Should the company invest in the machine? Explain.

Note: Please show how you came up with the solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91165495

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