Question
Consider the following two machines a company can purchase. The following table provides the costs of the machines and the annual cash flows obtained from
Consider the following two machines a company can purchase. The following table provides the costs of the machines and the annual cash flows obtained from the machines over their lifetimes.
The discount rate is 4%.
What is the net present value for each machine?
Machine A =
Machine B =
| Initial Cost | Cash Inflows per year | Years of Service | |
| Machine A | $16,000 | $10,000 | 6 |
| Machine B | $9,000 | $15,000 | 4 |
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Finance For Non Financial Managers
Authors: Gene Siciliano
1st Edition
0071413774, 978-0071413770
