Question
Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirement below. Blaylock Company wants to buy a numerically controlled (NC)
Follow the format shown in Exhibit 12B.1 and Exhibit 12B.2 as you complete the requirement below.
Blaylock Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of trenching machines. The outlay required is $700,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:
| Year | Cash Revenues | Cash Expenses |
| 1 | $1,600,000 | $1,000,000 |
| 2 | 1,600,000 | 1,000,000 |
| 3 | 1,600,000 | 1,000,000 |
| 4 | 1,600,000 | 1,000,000 |
| 5 | 1,600,000 | 1,000,000 |
Required:
Compute the investment's Net Present Value, assuming a required rate of return of 10 percent. Round present value calculations and your final answer to the nearest dollar. NPV = $ (not percent) I thought it was 1574480
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