Question
Liam Corp. is considering buying a striping machine, which will paint lines on parking lots. Here are facts about the machine's cash flows and costs
Liam Corp. is considering buying a striping machine, which will paint lines on parking lots. Here are facts about the machine's cash flows and costs that the company is considering:
Uneven Net Cash Flows: $10,000 in year one; $7,000 in year two; and $4,000 in year three.
Initial investment: $14,000 Present Value of 1 at 10% Table Value .9091 Year 1; .8264 Year 2; .7513 Year 3
Calculate the Net Present Value and make a recommendation about whether the investment should be made. The recommendation should be at least one sentence and explain anything Liam Corp. should consider.
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