he following present value factors are provided for use in this problen f $1 at 8% Present Value of an Annuity of $1 at % 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 X

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter9: Capital Budgeting And Cash Flow Analysis
Section9.A: Depreciation
Problem 2P
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The following present value factors are provided for use in this problem. Periods Present Value
of $1 at 8% Present Value of an Annuity of $1 at
8% 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Company wants
to purchase an asset for $37,000 with a four-year life and a $1,000 salvage value. Xavier
requires an 8% return on investment. The expected year - end net cash flows are $12,000 in
each of the four years. What is the machine's net present value (round to the nearest whole
dollar)?
Transcribed Image Text:The following present value factors are provided for use in this problem. Periods Present Value of $1 at 8% Present Value of an Annuity of $1 at 8% 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Company wants to purchase an asset for $37,000 with a four-year life and a $1,000 salvage value. Xavier requires an 8% return on investment. The expected year - end net cash flows are $12,000 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)?
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