Merrill Corp. has the following information available about a potential capital investment: ...
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Accounting
Merrill Corp. has the following information available about a potential capital investment:
Initial investment
$
600,000
Annual net income
$
60,000
Expected life
8
years
Salvage value
$
70,000
Merrills cost of capital
7
%
Assume straight line depreciation method is used.
Required: 1. Calculate the projects net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the final answer to nearest whole dollar.)
3. Calculate the net present value using a 14 percent discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the final answer to nearest whole dollar.)
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