Capital Budgeting using Net Present Value Method PV of Cost of Investment PV of Net Cashflow: Net Present Value Year 1 2 3 4 5 Initial investment = 2,700,000 Net Income + Depreciation 424,136.33 518,972.18 655,465.06 804,369.79 944,783.16 PV Factor of 12% 0.8929 0.7972 0.7118 0.6355 0.5674 Present Value of Net Cashflow 2,807,294.61 631,449.13 703,622.11 366,400.07 351,076.44 335,063.91 2,387,611.66 -419,682.95

Capital Budgeting using Net Present Value Method PV of Cost of Investment PV of Net Cashflow: Net Present Value Year 1 2 3 4 5 Initial investment = 2,700,000 Net Income + Depreciation 424,136.33 518,972.18 655,465.06 804,369.79 944,783.16 PV Factor of 12% 0.8929 0.7972 0.7118 0.6355 0.5674 Present Value of Net Cashflow 2,807,294.61 631,449.13 703,622.11 366,400.07 351,076.44 335,063.91 2,387,611.66 -419,682.95

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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