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2 questions Maxwell Machining is considering investing $100,000 in a new piece of machinery that will generate net annual cash flows of $50,000 each year
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Maxwell Machining is considering investing $100,000 in a new piece of machinery that will generate net annual cash flows of $50,000 each year for the next 5 years. The machine has a salvage value of $20,000 at the end of its 5 year useful life. Maxwell's cost of capital and discount rate is 10%. Which of the following tables and criteria should we use to discount the net annual cash flow? PV of annuity table, n=5,i=10% PV of annuity table, n=1,i=10% PV of a single sum table, n=1,i=10% PV of a single sum table, n=5,i=10% Silverberg Manufacturing is considering investing $90,000 in a new piece of machinery that will generate net annual cash flows of $40,000 each year for the next 4 years. The machine has a salvage value of $15,000 at the end of its 4 year useful life. Silverberg's cost of capital and discount rate is 6%. What is the dollar amount that we would multiply the factor by when using the PV of an Annuity table? $160,000 $15,000 $40.000 $90,000 Step by Step Solution
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