Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Brief Exercise 24 - 4 Caine Bottling Corporation is considering the purchase of a new bottling machine . The machine would cost $199 , 060

image text in transcribed
Brief Exercise 24 - 4 Caine Bottling Corporation is considering the purchase of a new bottling machine . The machine would cost $199 , 060 and has an estimated useful life of 8 years with zero salvage value . Management estimates that the new bottling machine will provide net* annual cash flows of $35 , 200 . Management also believes that the new bottling 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 PV table . Calculate the net present value . (If the net present value is negative use either a negative sign preceding the number eg - 45 or parentheses es ( 45 ). For calculation purposes, use 5 decimal places as displayed in the factor table* provided . Round present value answer to O decimal places, $.0. 125. ) Net present value How much would the reduction in downtime have to be worth in order for the project to be acceptable ? ( Round answer to O decimal places , e . g . 125. )

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Financial Accounting

Authors: Fred Phillips, Shana Clor Proell, Robert Libby, Patricia Libby

7th Edition

1265440166, 978-1265440169

More Books

Students also viewed these Accounting questions

Question

Draw a labelled diagram of the Dicot stem.

Answered: 1 week ago