(Answered) Question - jordan company buys equipment for 50000 that

Accounting

Question - Jordan Company buys equipment for $50,000 that will last for 4 years. The equipment will generate cash flows of $18,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 10% required rate of return.

Required:

(a) What is the present value (PV) of this investment at 10%?

(b) What is the net present value (NPV) of this investment? Should Jordan Company buy the equipment based on NPV? Justify your decision.

(d) What is the payback period?

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