Consider the following facts and do not consider the effect of income taxes: Initial cost of equipment Estimated life Salvage value Annual cash inflows Estimated cost of capital $45,000 $63,300. O $14,890. O $59,895. O $18,319. 5 years $5,000 $15,000 The net present value of the equipment is: 8%

Consider the following facts and do not consider the effect of income taxes: Initial cost of equipment Estimated life Salvage value Annual cash inflows Estimated cost of capital $45,000 $63,300. O $14,890. O $59,895. O $18,319. 5 years $5,000 $15,000 The net present value of the equipment is: 8%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Consider the following facts and do not consider the
effect of income taxes:
Initial cost of equipment
Estimated life
Salvage value
Annual cash inflows
Estimated cost of capital
$45,000
5 years
$5,000
$63,300.
O $14,890.
$59,895.
O $18,319.
$15,000
The net present value of the equipment is:
8%

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