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Question

Accounting

Required:
1.

Compute the net cash inflow (cash receipts less yearly cash operating expenses) anticipated from sale of the device for each year over the next six years.

2-a.

Using the data computed in (1) above and other data provided in the problem, determine the net present value of the proposed investment. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places.)

Now 1 2 3 4 5 6
Cost of equipment
Working capital
Yearly net cash flows
Release of working capital
Salvage value of equipment
Total cash flows
Discount factor (14%)
Present value
Net present value

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