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ABC Inc. must purchase a welding machine. The following is known about the machine and about possible cash flows. p=0.40 p=0.30 p=0.30 First Cost $40,000
ABC Inc. must purchase a welding machine. The following is known about the machine and about possible cash flows.
| p=0.40 | p=0.30 | p=0.30 | |
| First Cost | $40,000 | $40,000 | $40,000 |
| Annual Savings | 2,000 | 5,000 | 8,000 |
| Annual costs | 12,000 | 8,000 | 6,000 |
| actual salvage value | 4,000 | 5,000 | 6,500 |
The machine is expected to have a useful life of 8 years. The company has a MARR of 7%. Determine the NPW of the machine.
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