Corin Corporation is considering the purchase of a machine that would cost $420,000 and would last for 8 years. At the end of 8 years, the machine would have a salvage value of $97,000. The machine would reduce labor and other costs by $76,000 per year. The company requires a minimum pretax return of 16% on all investment projects. (Ignore income taxes.)

Required:

Compute the net present value of the project by inputting the variables that are entered into your calculator / Excel. (If a variable is not used in the calculation, input a zero (0)Round answers to the nearest dollar and use a minus sign for negative numbers.

Excel / calculator input:

Interest Rate (Rate, I, I/YR)

%

Nper, N

PMT

$

PV

$

FV

$

Net present value

$

Should be machine be purchased?

	Yes
	No