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jonny [76]
3 years ago
5

Peng Company is considering an investment expected to generate an average net income after taxes of $3,300 for three years.

Business
1 answer:
nikdorinn [45]3 years ago
3 0

Answer:

3482.12

Explanation:

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

NPV can be calculated using a financial calculator  

Cash flow = net income + depreciation = 16,200 + 3300 = 35,700

($56,100 - $7500) / 3 = 16,200

Cash flow in year 0 = 56,100

cash flow in year 1 and 2 = 35700

cash flow in year 3 = 35,700 + 7500

i = 5%

NPV =

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