What is the present value of the cash flows barney

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Barney Gumble is considering buying a new snowplow. The plow costs $20,000. With the plow, Barney expects to clear $5,000 per year for six years. At the end of that period, the plow will have ended its useful life and have no salvage value. Market interest rates are 6.0%.

a. What is the present value of the cash flows Barney expects to receive from this project?

b. Should he pursue this project? Briefly explain.

Reference no: EM132312541

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