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Explain this using annuity table nterior Products, Inc. is evaluating the purchase of a new machine to use in its manufacturing process. The new machine
Explain this using annuity table
nterior Products, Inc. is evaluating the purchase of a new machine to use in its manufacturing process. The new machine would cost $35,000 and have a useful life of 6 years. At the end of the machine's life, it would have a residual value of $2,800. Annual cost savings from the new machine would be $12,700 per year for each of the 6 years of its life. Interior Products, Inc. has a minimum required rate of return of 18% on all new projects. The net present value of the new machine would be closest to: (Round any intermediary calculations and your final answer to the nearest dollar.) EB (Click the icon to view the present value of $1 table.) EB (Click the icon to view the present value of annuity of $1 table.) A. $10,461 B. $44,425. C. $9,425 D. $1,036Step by Step Solution
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