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Financial Accounting | Accounting homework help

The following present value factors are provided for use in this problem.

Periods Present Value of $1 at 8% Present Value of an Annuity of $1 at 8%
1 0.9259 0.9259
2 0.8573 1.7833
3 0.7938 2.5771
4 0.7350 3.3121

Xavier Co. wants to purchase a machine for $38,000 with a four-year life and a $1,100 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $13,000 in each of the four years.

What is the machine’s net present value?


Artie’s Soccer Ball Company is considering a project with the following cash flows:

Initial outlay $750,000
Incremental after-tax cash flows from operations Years 1-4 $250,000 per year

Compute the NPV of this project if the company’s discount rate is 12%.


Your firm is considering a project that has the following set of cash flows. If the required rate of return for the project is 10%, find the net present value.

Year Cash Flow
0 -$35,000
1 10,000
2 20,000
3 10,000
4 30,000

Fitch Minster Armored Car can purchase a new vehicle for $200,000 that will provide annual net cash flow over the next five years of $40,000, $45,000, $50,000, $55,000, and $60,000. The salvage value of the vehicle will be $25,000. Assume that the vehicle is sold at the end of year 5.

Calculate the NPV of the ambulance if the required rate of return is 9%.

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