A factory costs $300,000. You forecast that it will produce cash inflows of $90,000 in year 1, $150,000 in year 2, and $240,000 in year 3. The discount rate is 11%.a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Question

10-03-2020
Business

contestada

A factory costs $300,000. You forecast that it will produce cash inflows of $90,000 in year 1, $150,000 in year 2, and $240,000 in year 3. The discount rate is 11%.a. What is the value of the factory? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Respuesta :

Otras preguntas

At the begining of 6 grade the ratio of number of the advanced math students to the number of regular students was 3:8. However after taking the placement tests

How do you find the perimeter of a dented square?

if arctan(3/5)=K Tan(k)=?

Here's a story problem...."Rita's wants to estimate the number of beans in a large jar. She takes out 100. she takes out 100 beans and marks them. Then she ret

if arctan(3/5)=K Tan(k)=?

Here's a story problem...."Rita's wants to estimate the number of beans in a large jar. She takes out 100. she takes out 100 beans and marks them. Then she ret

What was an effect of nationalism in Europe in the early 1900s?

hyderali230 hyderali230 · Answer 1 · 2020-03-15T03:14:06+01:00

Answer:

Value of the factory is $378,310.40

Explanation:

The value of factory can be determined by calculating the Net present value all cash flows associated with the factory. All the cash flows are discounted using a discount rate.

Years 1 2 3

Cash Flows $90,000 $150,000 $240,000

Discount Factor 11% 0.9009 0.8116 0.7312

Present Values $81,081.08 $121,743.4 $175,485.92

Net present value = $378,310.40