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Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its
Following is information on an investment in a manufacturing machine. The machine has zero salvage value. The company requires a 6% return from its investments. Initial investment $ (240,000) Net cash flows: Year 1 Year 2 Year 3 150,000 138,000 83,000 Assume that instead of a zero salvage value, as shown above, the machine has a salvage value of $30,000 at the end of its three-year life. Compute the machine's net present value. (PV of $1, FV of $1, PVA of $1, and FVA of $1) Note: Use appropriate factor(s) from the tables provided. Round all present value factors to 4 decimal places. Round present value amounts to the nearest dollar. Year 1 Year 2 Year 3 Year 3 salvage value Totals Initial investment Net present value Net Cash Flows Present Value Factor Present Value of Net Cash Flows $ 0 $ 0 $ 0
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