Figure 14-11.
Present value of an Annuity of $1 in Arrears

-Refer to Figure 14-11. Aragon Company is considering an investment in equipment that will have an initial cost of $560,290 and yield annual net cash inflows of $90,000. Yearly depreciation will be $56,000. The equipment is expected to be useful for 10 years and then it will be scrapped. Aragon requires a minimum rate of return of 10%.

Question

Figure 14-11.
Present value of an Annuity of $1 in Arrears
 
-Refer to Figure 14-11. Aragon Company is considering an investment in equipment that will have an initial cost of $560,290 and yield annual net cash inflows of $90,000. Yearly depreciation will be $56,000. The equipment is expected to be useful for 10 years and then it will be scrapped. Aragon requires a minimum rate of return of 10%.

Quizplus · Accepted Answer

The Answer of Figure 14-11.
Present value of an Annuity of $1 in Arrears
 
-Refer to Figure 14-11. Aragon Company is considering an investment in equipment that will have an initial cost of $560,290 and yield annual net cash inflows of $90,000. Yearly depreciation will be $56,000. The equipment is expected to be useful for 10 years and then it will be scrapped. Aragon requires a minimum rate of return of 10%.

Figure 14-11. Present Value of an Annuity of $1 in Arrears