Paul Company is considering purchasing a capital investment that is expected to provide annual cash inflows of $12,000 per year for 3 years. Assuming that the required rate of return is 10%, what is the present value of these cash inflows? Use Appendix Table 2. (Do not round PV factors and intermediate calculations. Round your final answer to the nearest dollar.)

Question

Quizplus · Accepted Answer

Revised estimate:
Net present value = (Expected cash flows × PV factor)
Net present value = $12,000 × 2.486852 = $29,842 (rounded)
PV factor (n = 3, i = 10)

Paul Company Is Considering Purchasing a Capital Investment That Is