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

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

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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

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Request for Solution File

Ask an Expert for Answer!!

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

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Q : Prepare journal entries for the shares of common stock

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