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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 Net cash flows: Year 1 Year 2 Year 3 $ (200,000) 135,000 134,000 103,000 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) (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
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