A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1, $195,000 in year 2, and $330,000 in year 3. The discount rate is 12%. a. Calculate the PV of cash inflows. (Do not round intermediate calculations. Round your answer to 2 decimal places.) Present value $ b. Is the factory a good investment? No Yes

A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1, $195,000 in year 2, and $330,000 in year 3. The discount rate is 12%. a. Calculate the PV of cash...

A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1, $195,000 in year 2, and $330,000 in year 3. The discount rate is 12%.

a.	Calculate the PV of cash inflows. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

Is the factory a good investment?

	No
	Yes

Answered Same DayDec 24, 2021

Answer To: A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1,...

David answered on Dec 24 2021

137 Votes

Title:
Cash Inflows
Answer to Part (a):- Answer to Part (b):-
(in $) Is the Factory a good investments?
YEAR CASH INFLOWS
DISCOUNTIN FACTORS
@ 12%
PRESENT VALUE OF CASH
INFLOWS
PARTICULARS AMOUNTS
1 135,000.00 0.8929 120,535.71 Present Value of cash...

SOLUTION.PDF

A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1, $195,000 in year 2, and $330,000 in year 3. The discount rate is 12%. a. Calculate the PV of cash...

Answer To: A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1,...

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment