Question
(Ignore income taxes in this problem.) Vandezande Inc. is considering the acquisition of a new machine that costs $370,000 and has a useful life of
(Ignore income taxes in this problem.) Vandezande Inc. is considering the acquisition of a new machine that costs $370,000 and has a useful life of 5 years with no salvage value. The incremental net operating income and incremental net cash flows that would be produced by the machine are:
|
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| Incremental net operating income | Incremental net cash flows |
|
| Year 1..... | $54,000 | $128,000 |
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| Year 2..... | $31,000 | $105,000 |
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| Year 3..... | $52,000 | $126,000 |
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| Year 4..... | $49,000 | $123,000 |
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| Year 5..... | $48,000 | $122,000 |
If the discount rate is 10%, the net present value of the investment is closest to?
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