Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

25 Vextra Corporation is considering the purchase of new equipment costing $45,000. The projected annual cash inflow is $13,000, to be received at the end

image text in transcribed
image text in transcribed
25 Vextra Corporation is considering the purchase of new equipment costing $45,000. The projected annual cash inflow is $13,000, to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Vextra requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows 12 Percent 0.8929 16901 2.4018 3.0373 Periods What is the net present value of the machine (rounded to the nearest whole dolilar)? O $39.485) O $(2.100) O $45,000 o $9,485. $(5,515). The following present value factors are provided for use in this problem Present Value Present Value of an l of $1 at 8% | Annuity of $1 at 8% Periods 0.9259 0.8573 0.7938 0.7350 0.9259 7833 2.5771 3.3121 Xavier Co. wants to purchase a machine for $37,500 with a four year life and a $1,200 salvage value. Xavier requires an 8% return on investment. The expected year-end net cash flows are $12,500 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)? O $4783. O $3.901 O $42.283. $(4,783). o $(3,901)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: William Messier, Steven Glover, Douglas Prawitt

8th Edition

0078025435, 9780078025433

More Books

Students also viewed these Accounting questions

Question

Write short notes on Interviews.

Answered: 1 week ago

Question

What are the purposes of performance appraisals?

Answered: 1 week ago