Hinda Company has gathered the following information related to an investment in new equipment: annual net...

Hinda Company has gathered the following information related
to an investment in new equipment:

annual net cash inflows .......................   $ 46,000
initial investment ............................      ???
life of new equipment .........................   10 years
working capital needed now ....................   $ 37,000
cost of capital ...............................   10%
income tax rate ...............................   30%

Assume the working capital needed now will be released for
investment elsewhere at the end of the project. The after-tax
net present value of the project was calculated as $24,740.

Calculate the amount of the initial investment.

To answer this question use the present value table factors
given below.
Factors from the present value of a lump sum table for:

i = 10%
n = 6       n = 7       n = 8       n = 9       n = 10 
0.565       0.513       0.467       0.424       0.385


Factors from the present value of an annuity table for:

i = 10%
n = 6       n = 7       n = 8       n = 9       n = 10
4.355       4.868       5.335       5.759       6.500

please label final answer as answer=............................

Expert Solution

jeff jeffy answered 1 year ago

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