What is the net present value of the investment, Accounting Basics

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What is the net present value of the investment

Wet and Wild Water Company drills small commercial oil wells. The company is in the process of analyzing the purchase of a new drill. Information on the proposal is provided below:

Investment in new drill $160,000
Working capital needed 32,000
Operations (per year for 4 yrs):
Cash receipts $160,000
Cash expenditures 88,000
Salvage value of oil drill 16,000
Discount rate 20%

What is the net present value of the investment? Assume there is no recovery of working capital at the end of the investment life.

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Accounting Basics: What is the net present value of the investment

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Accounting Basics: What is the net present value of the investment

Reference No:- TGS0686420

Have a Question? (oR Write a Review)

Recent Questions Asked Accounting Basics

Q : Describe a monthly flexible manufacturing overhead budget

Q : How would you determine what standard materials cost should

Q : What ios the total fixed production costs

Q : Should the company produce a special order

Q : What is the net present value of the investment

Q : Explain the overall annual net operating income

Q : What is the total contribution margin

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Q : Prepare journal entries for the shares of common stock

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Request for Solution File

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Accounting Basics: What is the net present value of the investment

Reference No:- TGS0686420

Recent Questions Asked Accounting Basics

Q : Describe a monthly flexible manufacturing overhead budget

Q : How would you determine what standard materials cost should

Q : What ios the total fixed production costs

Q : Should the company produce a special order

Q : What is the net present value of the investment

Q : Explain the overall annual net operating income

Q : What is the total contribution margin

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Q : Prepare journal entries for the shares of common stock

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