Home Express Moving Company is considering purchasing new equipment that costs $728,000. Its management estimates that the equipment will generate cash inflows of $50,000 semiannually for its 2 year life. Present value of $1: 6% 1 2 3 4 5 0.943 0.890 0.840 0.792 0.747 7% 8% 9% 0.926 0.917 0.857 0.842 0.794 0.772 0.735 0.708 0.935 0.873 0.816 0.763 0.713 0.681 0.650 10% 0.909 0.826 0.751 0.683 0.621 The company's annual required rate of return is 14%. Using the factors in the table, calculate the present value of the cash flows O $235,750 O $100,000 O $200,000 O $152,600
Home Express Moving Company is considering purchasing new equipment that costs $728,000. Its management estimates that the equipment will generate cash inflows of $50,000 semiannually for its 2 year life. Present value of $1: 6% 1 2 3 4 5 0.943 0.890 0.840 0.792 0.747 7% 8% 9% 0.926 0.917 0.857 0.842 0.794 0.772 0.735 0.708 0.935 0.873 0.816 0.763 0.713 0.681 0.650 10% 0.909 0.826 0.751 0.683 0.621 The company's annual required rate of return is 14%. Using the factors in the table, calculate the present value of the cash flows O $235,750 O $100,000 O $200,000 O $152,600
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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![QUESTION 9
Home Express Moving Company is considering purchasing new equipment that costs $728,000. Its management estimates that
the equipment will generate cash inflows of $50,000 semiannually for its 2 year life.
Present value of $1:
6%
1
2
3
4
5
0.943
0.890
0.840
0.792
0.747
O $235,750
O $100,000
O $200,000
Ⓒ$152,600
7%
8%
0.917
0.926
0.857 0.842
0.772
0.708
0.650
9%
0.935
0.873
0.816 0.794
0.763
0.735
0.713
0.681
10%
0.909
0.826
0.751
0.683
0.621
The company's annual required rate of return is 14%.
Using the factors in the table, calculate the present value of the cash flows](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d112553-0a04-465c-96b8-6b08c1740ad7%2Fb1d573c2-24e8-4ea9-97fe-58253531bd03%2Fawjzv22_processed.jpeg&w=3840&q=75)
Transcribed Image Text:QUESTION 9
Home Express Moving Company is considering purchasing new equipment that costs $728,000. Its management estimates that
the equipment will generate cash inflows of $50,000 semiannually for its 2 year life.
Present value of $1:
6%
1
2
3
4
5
0.943
0.890
0.840
0.792
0.747
O $235,750
O $100,000
O $200,000
Ⓒ$152,600
7%
8%
0.917
0.926
0.857 0.842
0.772
0.708
0.650
9%
0.935
0.873
0.816 0.794
0.763
0.735
0.713
0.681
10%
0.909
0.826
0.751
0.683
0.621
The company's annual required rate of return is 14%.
Using the factors in the table, calculate the present value of the cash flows
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