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Komok [63]
3 years ago
14

Hawkins Poultry Farms is considering the purchase of feeding equipment that costs $139,000 and will produce annual cash flows of

approximately $36,000 for five years. The equipment is expected to be sold at the end of five years for $40,000. What is the net present value of the proposed investment
Business
1 answer:
pychu [463]3 years ago
7 0

Answer:

NPV = $1,564.65

Explanation:

Here is the full question :

Hawkins Poultry Farms is considering the purchase of feeding equipment that costs $139,000 and will produce annual cash flows of approximately $36,000 for five years. The equipment is expected to be sold at the end of five years for $40,000.

What is the net present value of the proposed investment? Hawkins requires a 15 percent return on all capital investments

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 in year 0 = $-139,000

Cash flow each year from year 1 to 4 = $36,000

Cash flow in year 5 = $36,000 + $40,000 = $76,000.

i = 15%

NPV = $1,564.65

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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You expect KT Industries (KTI) will have earnings per share of $5 this year and expect that they will pay out $1.25 of these ear
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Answer:

9.75%

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3 years ago
a manufacturing plant averaged $740 of raw materials .$320 of work in process inventory and $1010 of finished goods inventory du
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Answer:

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Now put these values to the above formula  

So, the answer would be equal to  

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6 0
3 years ago
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Answer:

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