Question
A machine costs $29,000; it is expected to generate annual cash revenues of $10,000 and annual cash expenses of $4,000 for 5 years. The required
A machine costs $29,000; it is expected to generate annual cash revenues of $10,000 and annual cash expenses of $4,000 for 5 years. The required rate of return is 10%.
| FV of 1 (i = 10%, n = 5): | 1.611 |
| FV of a series of $1 cash flows (i = 10%, n = 5): | 6.105 |
| PV of $1 (i = 10%; n = 5): | 0.621 |
| PV of a series of $1 cash flows (i = 10%, n = 5): | 3.791 |
The net present value of the machine is:
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Intermediate Accounting
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
3rd Edition
0136946690, 978-0136946694
