Heedy Inc.is considering a capital investment proposal that costs $460,000 and has an estimated life of four years, and no residual value.The estimated net cash flows are as follows:
$$\begin{array} { c c }
\text { Year } & \text { Net Cash Flow } \
1 & \$ 195,000 \
2 & 160,000 \
3 & 120,000 \
4 & 80,000
\end{array}$$
The minimum desired rate of return for net present value analysis is 10%.The present value of $1 at compound interest rates of 10% for 1, 2, 3, and 4 years is 0.909, 0.826, 0.751, and 0.683, respectively.Determine the net present value.

Question

Heedy Inc.is considering a capital investment proposal that costs $460,000 and has an estimated life of four years, and no residual value.The estimated net cash flows are as follows:
​ $$\begin{array} { c c } 
\text { Year } & \text { Net Cash Flow } \
1 & \$ 195,000 \
2 & 160,000 \
3 & 120,000 \
4 & 80,000
\end{array}$$ ​
The minimum desired rate of return for net present value analysis is 10%.The present value of $1 at compound interest rates of 10% for 1, 2, 3, and 4 years is 0.909, 0.826, 0.751, and 0.683, respectively.Determine the net present value.

Quizplus · Accepted Answer

The Answer of Heedy Inc.is considering a capital investment proposal that costs $460,000 and has an estimated life of four years, and no residual value.The estimated net cash flows are as follows:
​ $$\begin{array} { c c } 
\text { Year } & \text { Net Cash Flow } \
1 & \$ 195,000 \
2 & 160,000 \
3 & 120,000 \
4 & 80,000
\end{array}$$ ​
The minimum desired rate of return for net present value analysis is 10%.The present value of $1 at compound interest rates of 10% for 1, 2, 3, and 4 years is 0.909, 0.826, 0.751, and 0.683, respectively.Determine the net present value.

Heedy Incis Considering a Capital Investment Proposal That Costs $460,000 and and Has