Question
Johanna is considering purchasing a greenhouse for use in her business that will cost $25,000. She anticipates selling this machine at the end of
Johanna is considering purchasing a greenhouse for use in her business that will cost $25,000. She anticipates selling this machine at the end of five years for $7,500. The machine is projected to produce the following cash flows: End of year 1: $500 End of year 2: $750 End of year 3: $1,000 End of year 4: $2,100 End of year 5: $4,300 Calculate the net present value (NPV) of purchasing the machine if Johanna's opportunity cost is 10% Note: the sign (+/-) makes a difference in NPV calculations. Based on your calculations, include the appropriate sign in your answer.
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Financial Accounting and Reporting a Global Perspective
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