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13 December, 02:58

Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. Park Co. requires a 10% return on its investments. 1-a. What is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor (s) from the tables provided. Round your present value factor to 4 decimals.)

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  1. 13 December, 03:11
    0
    If tables with present values factors are to be used, the solution to this question is best presented in a tabular format as shown below:

    Year Cashflow PV factor of $1 at 10% PV (cashflow*PV Factor)

    0 (27,000) 1.0000 (27,000)

    1 9,000 0.9091 8,182

    2 9,000 0.8264 7,438

    3 9,000 0.7513 6,762

    4 9,000 0.6830 6,147

    Net Present Value 1,529

    Net present value is the sum of all presents values from t=0 to t=4
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Home » Business » Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. Park Co. requires a 10% return on its investments. 1-a.
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