Pena company is considering an investment of $20,957 that provides net cash flows of $6900 annually for four years. Pena Company is considering an investment of $20,957 that provides net cash flows of $6,900 annually for four years.(a) If Pena Company requires a 9% return on its investments, what is the net present value of this investment? (PV of $1, FV of $1. PVAof $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)(b) Based on net present value, should Pena Company make this investment?earchComplete this question by entering your answers in the tabs below.Required AWhat is the net present value of this investment?Years 1-4Required BNet present valueNet Cash FlowsO EtXBPPV FactorRequired< PrevPresent Value ofNet Cash Flows$FIS0nRequired B >6 of 16 wwwDELLNext >KA Weather alert opedBookMcGrawHillPena Company is considering an investment of $20,957 that provides net cash flows of $6,900 annually for four years.(a) If Pena Company requires a 9% return on its investments, what is the net present value of this investment? (PV of $1. FV of $1. PVAof $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)(b) Based on net present value, should Pena Company make this investment?Complete this question by entering your answers in the tabs below.be here to searchRequired A Required BBased on net present value, should Pena Company make this investment?Based on net present value, should Pena Company make this investment?Et< Required ABP< PrevFIS6 of 16DELLNext >76°F Sunny

Net Present Value(NPV) is a financial metric that is used to evaluate the potential investment…

Answered: (a) If Pena Company requires a 9%…

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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Pena Company is considering an investment of $30,455 that provides net cash flows of $9,400 annually for four years. (a) If Pena Company requires a 7% return on its investments, what is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) Based on net present value, should Pena Company make this investment? Complete this question by entering your answers in the tabs below. Required A Required B What is the net present value of this investment? Years 1-4 Net present value Net Cash Flows X PV Factor
Pena Company is considering an investment of $21,705 that provides net cash flows of $6,700 annually for four years. (a) If Pena Company requires a 7% return on its investments, what is the net present value of this investment? (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) Based on net present value, should Pena Company make this investment? Complete this question by entering your answers in the tabs below. Required A Required B What is the net present value of this investment? Years 1-4 Initial investment Net present value Net Cash Flows 6,700 x PV Factor Required A Present Value of Net Cash Flows 0 21,705 Required B >
Pena Company is considering an investment of $30,485 that provides net cash flows of $9,000 annually for four years. (a) If Pena Company requires a 6% return on its investments, what is the net present value of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (b) Based on net present value, should Pena Company make this investment? Complete this question by entering your answers in the tabs below. Required A What is the net present value of this investment? Years 1-4 Required B Net present value Net Cash Flows X PV Factor Present Value of Net Cash Flows S 0 Required B >
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Perez Company is considering an investment of $26,945 that provides net cash flows of $8,500 annually for four years.(a) What is the internal rate of return of this investment? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.)(b) The hurdle rate is 7%. Should the company invest in this project on the basis of internal rate of return?
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