Question
(Ignore income taxes in this problem.) The management of Mashiah Corporation is considering the purchase of a machine that would cost $520,000, would last for
(Ignore income taxes in this problem.) The management of Mashiah Corporation is considering the purchase of a machine that would cost $520,000, would last for 9 years, and would have no salvage value. The machine would reduce labor and other costs by $108,000 per year. The company requires a minimum pretax return of10% on all investment projects.
Click here to view Exhibit 8B-1 and Exhibit 8B-2 to determine the appropriate discount factor(s) using tables.
The net present value of the proposed project is closest to:
$138,839
$552,000
$101,972
$229,422
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