(Present value tables are needed. )O'Mally Department Stores is considering two possible expansion plans.One proposal involves opening 5 stores in Indiana at the cost of $1,920,000.Under the other proposal,the company would focus on Kentucky and open 6 stores at a cost of $2,500,000.The following information is available:

The net present value of the Indiana proposal is closest to

Question

(Present value tables are needed. )O'Mally Department Stores is considering two possible expansion plans.One proposal involves opening 5 stores in Indiana at the cost of $1,920,000.Under the other proposal,the company would focus on Kentucky and open 6 stores at a cost of $2,500,000.The following information is available:

The net present value of the Indiana proposal is closest to

Quizplus · Accepted Answer

B)
Cash flow $400,000 × (PVA 10yr @ 10%)6.145 = 2,458,000
Residual 50,000 × (PV 10 yr @ 10%).386 = 19,300
Less Cost -1,920,000
NPV 557,300

(Present Value Tables Are Needed