1 answer

& Time Off Bidding Citiation pter 6 Homework Saved What would be the net present value...

Question:

& Time Off Bidding Citiation pter 6 Homework Saved What would be the net present value of a microwave oven that costs $159 an

State Center Single-Signon Se X BA-30-ONLINE (81724) Chapter 6 Homework X Fresno City College X A ezto-cf-media.mheducation.c

& Time Off Bidding Citiation pter 6 Homework Saved What would be the net present value of a microwave oven that costs $159 and will save you $68 a year in time and food away from home? Assume an average return on your savings of 4 percent for five years. (Hint: Calculate the present value of the annual savings, then subtract the cost of the microwave.) Use Exhibit 1-D. (Round PVA factor to 3 decimal places and final answer to 2 decimal places.) Net present value ts Skipped eBook Print eferences
State Center Single-Signon Se X BA-30-ONLINE (81724) Chapter 6 Homework X Fresno City College X A ezto-cf-media.mheducation.com/Media/Connect Production/bne/finance/kapoor 6e/kap1965X ex01D.jpg Time Off Bidding Citiation oc\ Apps Exhibit 1 -D Present Value of $1 Received at the End of Each Perlod for a Given Number o 1% 2% 3% 4% 5% 6% 7% Period 0.99 0.935 0.943 0.98 0.952 0.971 0.962 2 1.97 1.942 1.859 1.833 1.808 1.913 1.886 2.723 3 2.941 2.884 2.829 2.775 2.673 2.624 4 3.902 3.808 3.546 3.465 3.717 3.63 3.387 4.853 4.713 4.58 4.452 4.329 4.212 4.1 6 5.795 5.601 5.417 5.242 5.076 4.917 4.767 7 6.728 6.472 6.23 6.002 5.786 5.582 5.389 7.652 7.325 7.02 6.733 6.463 6.21 5.971 9 8.566 8.162 7.786 7.435 7.108 6.515 6.802 10 9.471 8.983 8.53 8.111 7.722 7.36 7.024 10.368 11 9.787 9.253 8.76 8.306 7.887 7.499 10.575 11.255 12 9.954 9.385 8.863 8.384 7.943 13 12.134 11.348 10.635 9.986 9.394 8.853 8.358 14 13.004 12.106 11.296 10.563 9.899 9 295 8.745 15 13.865 12.849 11.938 11.118 10.38 9.712 9.108 16 14.718 13.578 12.561 11.652 10.838 10.106 9.447 17 15.562 14.292 13.166 12.166 11.274 10.477 9.763 18 16.398 14.992 13.754 12.659 11.69 10.828 10.059 17.226 19 15.678 14.324 13.134 12.085 11.158 10.336 e hp

Answers

Below is the cash flow and NPV calculation for the above microwave:

Year Cash Flow Present Value of Cash Flow (Cash Flow/1.04^year))
0 (159.00)                                          (159.00)
1       68.00                                              65.38
2       68.00                                              62.87
3       68.00                                              60.45
4       68.00                                              58.13
5       68.00                                              55.89
Total (NPV)                                            143.72

Hence, net present value =$143.72

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