Carlin Company, which uses net present value to analyze investments, requires a 10% minimum rate of return. A staff assistant recently calculated a $500,000 machine's net present value to be $86,400, excluding the impact of straight-line depreciation.FV of 1 (i=10%, n=5):1.611FV of a series of $1 cash flows (i=10%, n=5):6.105 PV of $1 (i=10%; n = 5): 0.621PV of a series of $1 cash flows (i=10%, n=5):3.791 If Carlin ignores income taxes and the machine is expected to have a five-year service life, the correct net present value of the machine would be:
A. $186,400.
B. $292,700.
C. $465,500.
D. $(13,600).
E. $86,400.
Answer: E
You might also like to view...
The relevance of accounting information is also an indication of its reliability
Indicate whether the statement is true or false
Which of the following paved the way for the creation of a business process design?
A. linkages B. primary activities C. support activities D. electronic data interchanges E. triggers
________ is a disadvantage of secondary research, while ________ is a disadvantage of primary research.
A. Sophisticated training required to obtain it; potential bias B. Cost; outdated information C. Time required for collection; sources not original D. Potential bias; costliness E. Outdated information; information not relevant to data needs
Suppose 6 months ago a Swiss investor bought a 6-month U.S. Treasury bill at a price of $9,708.74, with a maturity value of $10,000.00. The exchange rate at that time was 1.441 Swiss francs per dollar. Today, at maturity, the exchange rate is 1.324 Swiss francs per dollar. What is the annualized rate of return to the Swiss investor? Do not round the intermediate calculations and round the final answer to two decimal places.
A. -11.26% B. -10.73% C. -9.98% D. -9.76% E. -10.83%