Pablo Company is considering buying a machine that will yield income of $3,300 and net cash flow of $19,400 per year for three years. The machine costs $56,100 and has an estimated $7,800 salvage value. Pablo requires a 15% return on its investments. Compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your present value factor to 4 decimals.) Years 1-3 Totals Net present value Net Cash Flows X PV Factor = E E = = E Present Value of Net Cash Flows $ 10 0

Pablo Company is considering buying a machine that will yield income of $3,300 and net cash flow of $19,400 per year for three years. The machine costs $56,100 and has an estimated $7,800 salvage value. Pablo requires a 15% return on its investments. Compute the net present value of this investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Negative amounts should be indicated by a minus sign. Round your present value factor to 4 decimals.) Years 1-3 Totals Net present value Net Cash Flows X PV Factor = E E = = E Present Value of Net Cash Flows $ 10 0

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 3CMA

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