Paul Company is considering purchasing a capital investment that is expected to provide annual cash inflows of $11,700 per year for 3 years. Assuming that the required rate of return is 7%, what is the present value of these cash inflows?(PV of $1and PVA of $1) (Use appropriate factor(s) from the tables provided. Do not round PV factors and intermediate calculations. Round your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

Using the Present Value of an Annuity table (PVA), we can find the present value of the three-year cash inflows at a 7% discount rate. 
PV = $11,700 x 2.6248 (PVA, n=3, i=7%) 
PV = $30,704 
Therefore, the best choice is (C) $30,704.

Paul Company Is Considering Purchasing a Capital Investment That Is