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:
$\begin{array}{cr}
\text { Net Cash Flow } & \text { Year } \
\$ 195,000 & 1 \
160,000 & 2 \
120,000 & 3 \
80,000 & 4
\end{array}$ 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:
 $\begin{array}{cr}
\text { Net Cash Flow } & \text { Year } \
\$ 195,000 & 1 \
160,000 & 2 \
120,000 & 3 \
80,000 & 4
\end{array}$ 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:
 $\begin{array}{cr}
\text { Net Cash Flow } & \text { Year } \
\$ 195,000 & 1 \
160,000 & 2 \
120,000 & 3 \
80,000 & 4
\end{array}$ 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 Inc Is Considering a Capital Investment Proposal That Costs $460,000