Capital Budgeting We are considering the purchase of a machine that will cost $10,000 and increase profits by $4,000 each year over its 5-year useful life. There is no salvage value on the machine at the end of five years. Depreciation will be $1,000 per year and is not included in the profit listed above. The company's cost of capital is 8%. 1) Calculate the Net Present Value:

Capital Budgeting We are considering the purchase of a machine that will cost $10,000 and increase profits by $4,000 each year over its 5 -year useful life. There is no salvage value on the machine at the end of five years. Depreciation will be $1,000 per year and is not included in the profit listed above. The company's cost of capital is 8%. 1) Calculate the Net Present Value