Question
ABC Inc. must purchase a welding machine. The following is known about the machine and about possible cash flows. p =.40 p =.30 p =.30
ABC Inc. must purchase a welding machine. The following is known about the machine and about possible cash flows.
|
| p=.40 | p=.30 | p=.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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Complete Handbook Of Operational And Management Auditing
Authors: William T. Thornhill
1st Edition
0131611410, 978-0131611412
