Question
Herky Foods is considering acquisition of a new wrapping machine. The initial investment is estimated at $2.09 million, and the machine will have a 5-year
Herky Foods is considering acquisition of a new wrapping machine. The initial investment is estimated at $2.09 million, and the machine will have a 5-year life with no salvage value. Using a discount rate of 5%, determine the net present value (NPV) of the machine given its expected operating cash inflows shown in the following table
1 $668,800 2 $627,000 3 $501,600 4 $585,200 5 $334,400
Based on the project's NPV, should Herky make this investment?
The net present value (NPV) of the new wrapping machine is $____ . (Round to the nearest cent.)
Based on the project's NPV, should Herky make this investment? (Select the best answer below.)
Yes or No
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