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Home Q & A Board Other Fields Homework Help Business Accounting
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7 years ago
Lloyd's Moving Company is considering purchasing new equipment that costs $728,000. Its management estimates that the equipment will generate cash flows as follows:

Year 1   $214,000
2   214,000
3   264,000
4   264,000
5   150,000

Present value of $1:

   6%   7%   8%   9%   10%
1   0.943   0.935   0.926   0.917   0.909
2   0.890   0.873   0.857   0.842   0.826
3   0.840   0.816   0.794   0.772   0.751
4   0.792   0.763   0.735   0.708   0.683
5   0.747   0.713   0.681   0.650   0.621

The company's annual required rate of return is 9%. Using the factors in the table, calculate the present value of the cash flows. (Round all calculations to the nearest whole dollar.)
A) $894,000
B) $892,000
C) $864,646
D) $853,320
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
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#2
7 years ago
Will mark this subject solved, thanks
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#3
3 years ago
thaks
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