MANAGERIAL ACCOUNTING CONNECT ACCESS
MANAGERIAL ACCOUNTING CONNECT ACCESS
17th Edition
ISBN: 9781265750879
Author: Garrison
Publisher: MCG
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Chapter 14, Problem 11F15
To determine

NPV is computed by deducting initial investment amount from the present value. Here, after salvage, initial investment amount is $2,675,000 as computed below and present value at 14% is $3,431,000 as computed in previous part of this question. Present value of cash outflows is $2,975,000 that is given in the question.

    Particulars Amount ($)
    Cash out flows 2,975,000
    (-) Salvage value 300,000

    Initial Investment 2,675,000

The project’s NPV would be lower or higher, when salvage is $300,000.

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MANAGERIAL ACCOUNTING CONNECT ACCESS

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