(Present Value Tables Are Needed Moreno Corporation's Required Rate of Return Is 14

question 44

Multiple Choice

(Present value tables are needed.) Moreno Corporation is considering investing in specialized equipment costing $525,000.The equipment has a useful life of 5 years and a residual value of $55,000.Depreciation is calculated using the straight-line method.The expected net cash inflows from the investment are: $$\begin{array} { | c | c r | } \hline \text { Year 1 } & \$ & 245,000 \\\hline \text { Year 2 } & \$ & 190,000 \\\hline \text { Year 3 } & \$ & 152,000 \\\hline \text { Year 4 } & \$ & 112,000 \\\hline \text { Year 5 } & \$ & 95,000 \\\hline & \$ & 794,000 \\\hline\end{array}$$ Moreno Corporation's required rate of return is 14%.
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The net present value of the investment is closest to:

• A)$25,639 positive.
• B)$54,184 positive.
• C)$82,729 positive.
• D)$269,000 positive.

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