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Bridgeport Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $ 2 2 0 , 0 0 0 and

Bridgeport Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $220,000 and has an
estimated useful life of eight years with zero salvage value. Management estimates that the new bottling machine will provide net
annual cash flows of $40,000. Management also believes that the new machine will save the company money because it is expected to
be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 10%.
Click here to view the factor table.
Calculate the net present value. (If the net present value is negative, use either a negative sign preceding the number e.g.-45 or parentheses
e.g.(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.1,250.)
Net present value
How much would the reduction in downtime have to be worth in order for the project to be acceptable?
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