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.
| Initial Cost | Cash Inflows per year | Years of Service | |
| Machine A | $19,000 | $12,000 | 7 |
| Machine B | $9,000 | $11,000 | 5 |
The discount rate is 10%.
What is the net present value for each machine?
Machine A =
Machine B =
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Financial Management For Decision Makers
Authors: Peter Atrill
9th Edition
1292311436, 978-1292311432
