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Calculate net present value of proposed equipment purchase

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Reference no: EM133150227

Question - The Sheffield Company is planning to purchase $476,000 of equipment with an estimated 7-year life and no estimated salvage value. The company has projected the following annual cash flows for the investment:

Year

Projected Cash Flows

1

$247,000

2

135,000

3

121,000

4

58,800

5

67,100

6

41,400

7

40,600

Total

$710,900

Required - Calculate the net present value of the proposed equipment purchase. Sheffield uses a 7% discount rate.

Reference no: EM133150227

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