Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Clairmont Corporation is considering the purchase of a machine that would cost $190,000 and would last for 10 years. At the end of 10 years,

Clairmont Corporation is considering the purchase of a machine that would cost $190,000 and would last for 10 years. At the end of 10 years, the machine would have a salvage value of $16,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $32,000. The company requires a minimum pretax return of 13% on all investment projects. (Ignore income taxes in this problem.)

Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table.

The net present value of the proposed project is closest to: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.)

$(26,995)

$20,568

$130,000

$(11,648)

image text in transcribed

image text in transcribedimage text in transcribed

Clairmont Corporation is considering the purchase of a machine that would cost $190,000 and would last for 10 years. At the end of 10 years, the machine would have a salvage value of $16,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $32,000. The company requires a minimum pretax return of 13% on a investment projects. (Ignore income taxes in this problem.) Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using table The net present value of the proposed project is closest to: (Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.) O $(26,995) O $20,568 O $130,000 O $(11,648)

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

The Customer Base Audit The First Step On The Journey To Customer Centricity

Authors: Peter Fader, Bruce G.S. Hardie, Michael Ross

1st Edition

1613631618, 978-1613631614

More Books

Students also viewed these Accounting questions