Question
Cars Inc. is considering purchasing a diagnostic machine. The machine would make it possible for the company to bid on jobs that it currently isnt
Cars Inc. is considering purchasing a diagnostic machine. The machine would make it possible for the company to bid on jobs that it currently isnt equipped to do. Estimates regarding the machine are provided below.
| Machine Estimates | |
| Original Cost | $77,000 |
| Estimated Life | 8 years |
| Salvage Value | $0 |
| Estimated Annual Cash Inflows | $19,900 |
| Estimated Annual Cash Outflows | $4,800 |
Calculate the net present value of the machine investment. Assume a 9% discount rate.
Group of answer choices
A: -$20,074
B: $6,576
C: $20,074
D: $15,100
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Financial Accounting For MBAs
Authors: Easton, Wild, Halsey, McAnally
7th Edition
1618532316, 978-1618532312
