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(Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a...

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Accounting

(Ignore income taxes in this problem.) Overland Corporation has gathered the following data on a proposed investment project:

Investment required in equipment $ 680,000
Annual cash inflows $ 66,000
Salvage value of equipment $ 0
Life of the investment 20 years
Required rate of return 7 %

The company uses straight-line depreciation on all equipment. Assume cash flows occur uniformly throughout a year except for the initial investment.

Click here to view Exhibit 8B-2 to determine the appropriate discount factor(s) using tables.

The net present value of this investment is:

$66,000

$19,204

$680,000

$62,750

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