Following is information on an investment considered by Hudson Co Assume the inv

Question

Following is information on an investment considered by Hudson Co Assume the investment value of$20,000. The company requires a 12% return from its investments. Investment A1 ($200.000) Initial investment Expected net cash flows in year (excluding salvage value): 100,000 90,000 75,000 imvestment's net present value. (FV of S1. PV of $1. EVA ofSt and Py/A ot $t) (Use appropriate factors) from the tables provided. Round all present value factors to 4 decimat places.) Net cash! PresentValue-Present Value of Net Flows Of 1 at 12% Year 1 Year 2 Year 3 Totals Amount invested Net present value

Explanation / Answer

Net cash flow Present value of 1 at 12% Present value of Net cash flow Year 1 $    100,000 0.8929 $           89,285.71 Year 2 $      90,000 0.7972 $           71,747.45 Year 3 $      75,000 0.7118 $           53,383.52 $    265,000 $         214,416.68 Amount invested $       (200,000.00) Net Present Value $           14,416.68

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