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Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $211,318 and has an estimated useful life of 8
Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $211,318 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 $34,700. 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 8%
Net present value?
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