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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

<u>Given Information</u>

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 <u>$2,622</u>

Total <u>$40,146</u>

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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1 year ago

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2 years ago

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