24000 45636 60000 Joetz Corporation nas gathered the tollowi

$24,000

$45,636

$60,000

Joetz Corporation nas gathered the tollowing data on a proposed investment project (ignore income taxes.): Investment required in equipment Annual cash inflows Salvage value of equipment Life of the investment Required rate of return $30,000 6,000 15 years 10% Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided. The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment. The net present value of the investment is: Multiple Choice $15,636

Solution

A) $15,636

Net Present Value= Present Value of Cash Inflow - Present Value of Cash Outflow

= $6,000 * (PVAF,10%,15) - $30,000

= $6,000*7.61 - $30,000

= $45,636.48 - $30,000

= $15,636.48