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Exercise 1 0 - 4 A ( Algo ) Determining the present value of an annuity LO 1 0 - 1 The dean of the
Exercise A Algo Determining the present value of an annuity LO
The dean of the School of Fine Arts is trying to decide whether to purchase a copy machine to place in the lobby of the bulling. The
machine would add to student convenlence, but the dean feels compelled to earn an percent return on the investment of funds.
Estimates of cash Inflows from copy machines that have been placed in other university buildings indicate that the copy machine
would probably produce Incremental cash Inflows of approximately $ per year. The machine is expected to have a threeyear
useful life with a zero salvage value.
Note: Use approprlate factors from the tables provided.
Required
a Use Present Value Appendix PV of $ to determine the maximum amount of cash the dean should be willing to pay for a copy
machine.
Note: Round your Intermedlate calculations and final answer to decimal places.
b Use Present Value Appendix PVA of $ to determine the maximum amount of cash the dean should be willing to pay for a copy
machine.
Note: Round your final answer to decimal places.
Answer is complete but not entirely correct.
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