Question
Aliara Corporation is considering purchasing one of two new machines. Estimates for each machine are as follows: Machine A Machine B Investment $107,800 $155,700 Estimated
Aliara Corporation is considering purchasing one of two new machines. Estimates for each machine are as follows:
Machine A | Machine B | ||||||
Investment | $107,800 | $155,700 | |||||
Estimated life | 8 years | 8 years | |||||
Estimated annual cash inflows | $26,600 | $40,000 | |||||
Estimated annual cash outflows | $6,300 | $9,800 |
Salvage value for each machine is estimated to be zero. Click here to view PV table. Calculate the net present value of each project assuming a 6% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to 0 decimal places, e.g. 125.)
Net Present Value | ||
Machine A | $ | |
Machine B | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started