LARK Company purchased equipment in 2020 costing $160,000. LARK expected cash inflows of $42,000 for the next four years and $12,000 salvage at the end of the fourth year. The minimum acceptable rate...


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LARK Company purchased equipment in 2020 costing $160,000. LARK expected<br>cash inflows of $42,000 for the next four years and $12,000 salvage at the end of<br>the fourth year. The minimum acceptable rate of return (or the discount rate) was<br>8%. Use the time value of money tables in Appendix A of your textbook. For blank<br>one, calculate the net present value for the equipment. For blank two, calculate the<br>profitability index to the nearest two decimal places. For blank three, using either<br>the NPV or the PI, should the project be accepted?<br>Blank # 1<br>Blank # 2<br>A/<br>Blank # 3<br>

Extracted text: LARK Company purchased equipment in 2020 costing $160,000. LARK expected cash inflows of $42,000 for the next four years and $12,000 salvage at the end of the fourth year. The minimum acceptable rate of return (or the discount rate) was 8%. Use the time value of money tables in Appendix A of your textbook. For blank one, calculate the net present value for the equipment. For blank two, calculate the profitability index to the nearest two decimal places. For blank three, using either the NPV or the PI, should the project be accepted? Blank # 1 Blank # 2 A/ Blank # 3

Jun 06, 2022
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