What is the net present value, Accounting Basics

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What is the net present value

Company VGG is thinking of buying a factory to meet the growing demand for its products. The following is the financial data regarding this proposal.

Cost of the factory today $20 million
Annual cash flow $2 million
Life of the factory 15 years
Cost of capital 8%
CALCULATE THE FOLLOWING:
Payback period in years
Net present value.

Based on your answer for 1.b above, should the company buy this factory? Why or why not?Now assume that after 15 years, the factory can be sold for $12 million. What is the net present value?

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Accounting Basics: What is the net present value

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Accounting Basics: What is the net present value

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Recent Questions Asked Accounting Basics

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Ask an Expert for Answer!!

Accounting Basics: What is the net present value

Reference No:- TGS0686366

Recent Questions Asked Accounting Basics

Q : Compute and label the contribution margin per unit

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Q : Cutchin corporation is based on budgeted direct labor

Q : Company had processed chemical bh

Q : What is the net present value

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