24.1

Factor Company Is planning to add a new product to its line. To manufacture this product, the company needs to buy a new machine at a $507,000 cost with an expected four-year life and a $15,000 salvage value. All sales are for cash, and all costs are out-of-pocket, except for depreciation on the new machine. Additional Information Includes the following. (PV of $1, FV of $1, PVA of $1, and FVA of \$1) (Use approprlate factor(s) from the tables provlded.) Compute the net present value for this machine using a discount rate of 6% and assuming that cash flows occur at each year-end. (Hint: Salvage value is a cash inflow at the end of the asset's life.) (Do not round intermediate calculations. Amounts to be deducte should be indicated by a minus sign.)