Clean Air Systems buys a diagnostic piece of equipment for $270,000. The machine will be depreciated on a straight-line basis for 10 years with a salvage value of $50,000. The company expects the machine to be able to generate after-tax cash flows of $43,000 in each of the 10 years, and then it will sell the machine for $50,000 at the end of 10 years. The discount rate is 7%.

What is the Net Present Value? Why?

Clean Air Systems buys a diagnostic piece of equipment for $270,000. The machine will be depreciated on a straight-line basis for 10 years with a salvage value of $50,000. The company expects the machine to be able to generate after-tax cash flows of $43,000 in each of the 10 years, and then it will sell the machine for $50,000 at the end of 10 years. The discount rate is 7%. What is the Net Present Value? DATA HOME INSERT fx C E G D I Cash Flows 1 -270,000 2 1 43,000 Rate (%): 43,000 7% 2 4 NPV ($) 3 43,000 5 4 43,000 6 43,000 7 6 43,000 7 43,000 43,000 10 43,000 11 10 93,000 12 13 14 15 16 17 18 19 20