Question: How to calculate the net present value in this case? (The correct answer is -39) B4-17 (book/static) Question Help Your friend in mechanical engineering has

 How to calculate the net present value in this case? (The

How to calculate the net present value in this case? (The correct answer is -39)

B4-17 (book/static) Question Help Your friend in mechanical engineering has invented a money machine. The main drawback of the machine is that it is slow. It takes one year to manufacture $100. However, once built, the machine will last forever and will require no maintenance. The machine can be built immediately, but it will cost $1,000 to build. Your friend wants to know if he should invest the money to construct it. If the interest rate is 9.5% per year, what should your friend do? What is your advice if the machine takes one year to build? A. Accept the machine because the NPV is equal to or greater than $0. B. Reject the machine because the NPV is equal to or greater than $0. O C. Reject the machine because the NPV is less than $0. OD. Accept the machine because the NPV is equal to or less than $0. What is your advice if the machine takes one year to build? The net present value in this case will be $ - 39. (Round to the nearest dollar.) What should your friend do? (Select the best choice below.) O A. Accept the machine because the NPV is equal to or greater than $0. Reiert the machine herause the NPV is ennal to or areater than Sn Question is complete. Tap on the red indicators to see incorrect answers. OR

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