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29 Imani Corporation is considering the purchase of new equipment costing $63,000. The projected annual cash inflow is $20,500, to be received at the end
29
Imani Corporation is considering the purchase of new equipment costing $63,000. The projected annual cash inflow is $20,500, to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Imani requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows:
Periods | 12 percent |
1. | 0.8929 |
2 | 1.6901 |
3 | 2.4018 |
4 | 3.0373 |
What is the net present value of the machine (rounded to the nearest whole dollar)?
$(19,000) | ||
$19,000 | ||
$735 | ||
$(735) |
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