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Vikentia [17]
3 years ago
15

Hsung Company accumulates the following data concerning a proposed capital investment: cash cost $175,846, net annual cash flows

$37,300, and present value factor of cash inflows for 10 years 5.02 (rounded). (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
Determine the net present value, and indicate whether the investment should be made.
Net present value $
The investment be made.
Business
1 answer:
Luba_88 [7]3 years ago
5 0

Answer:

11400

the investment should be made because NPV is positive

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV =( Net annual cash flows x present value factor)  - cost

(37300 x 5,02 ) - $175,846 = 11400

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P0=$27,50

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less than $1 million.

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