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  1. business
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  3. assume nagle-siegert uses a discount rate of 15%,

Assume Nagle-Siegert uses a discount rate of 15%, not 10%. Illustration A-24 Present value computations...

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Accounting

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Assume Nagle-Siegert uses a discount rate of 15%, not 10%. Illustration A-24 Present value computations at 15% Present Values-15% Discount Rate Present value of net operating cash flows received annually over 5 years at 15% Present value of salvage value (cash) to be received in 5 years at 15% Present value of cash inflows Present value of cash outflows (purchase price due today at 15%): Net present value The decision to invest should be Cash payable on delivery (today): $154,000. Net cash flow from operating the rig: $40,000 for 5 years Cash received from sale of rig at the end of 5 years: $35,000. A-46 LO

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