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An Asset Is Purchased for $40,000

question 99

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An asset is purchased for $40,000. It is expected to provide an additional $10,000 of annual net cash inflows. The asset has a 10-year life and an expected salvage value of $3,300. The hurdle rate is 10%. The present value of an annuity factor of 10% for 10 years is 6.1446. The present value of $1 discounted for 10 years at 10% is 0.3855. Given the data provided, the net present value of the investment is approximately:


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