Access over 20 million homework & study documents

search

The management of Douglass Corporation is considering the purchase o

Content type
User Generated
Rating
Showing Page:
1/1
The management of Douglass Corporation is considering
the purchase of a new machine costing $750,000. The
companys desired rate of return is 6%. The present value
factor for an annuity of $1 at interest of 6% for 5 years is
4.212. The present value index for this investment is
Solution
ANswer:
NPV = 187500 *4.212 - 750000 = 789750 - 750000 =
39750
PI = pv of Inflows / Outflow = 789750 / 750000 = 1.053
THankyou

Sign up to view the full document!

lock_open Sign Up
Unformatted Attachment Preview
The management of Douglass Corporation is considering the purchase of a new machine costing $750,000. The companys desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. The present value index for this investment is Solution ANswer: NPV ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Anonymous
Just what I was looking for! Super helpful.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Documents