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2 years ago

The following data pertain to an investment proposal (Ignore income taxes.):

Business

1 answer:

Hoochie [10]2 years ago

6 0

The net present value of the proposed investment is closest to $5,146.

Net present value = Present value of cash-flows - Initial investment

Given Information

PV of cashflows at 18%

Cash flows PV at 18% P.V. of cash-flows

$12,000 (Cost saving) 3.127 $37,524

$6,000 (Salvage) 0.437 $2,622

Total $40,146

Net present value = $40,146 - $35,000

Net present value = $5,146

Therefore, the net present value of the proposed investment is closest to $5,146.

Learn more about Net present value

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