Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A machine costs $ 1 . 2 M . It will increase your revenue by $ 3 0 0 K per year FOR 5 YEARS.

A machine costs $1.2M. It will increase your revenue by $300K per year FOR 5 YEARS. Assume a *3-year* depreciation...what's the NPV of the decision to buy this machine? (Answer is close to $85K)
(Tax rate is 21%, discount rate is 10%/year.) Edited to add the machine works for 5y.

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_2

Step: 3

blur-text-image_3

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

Introduction to Finance Markets Investments and Financial Management

Authors: Melicher Ronald, Norton Edgar

15th edition

9781118800720, 1118492676, 1118800729, 978-1118492673

More Books

Students also viewed these Finance questions

Question

How much autonomy and independence will you have in your work life?

Answered: 1 week ago