Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Marinis Corporation is considering buying a brand new machine and has gathered the following data: Investment $105,600 Estimated life 6 years Estimated annual cash inflows

image text in transcribedimage text in transcribedimage text in transcribed

Marinis Corporation is considering buying a brand new machine and has gathered the following data: Investment $105,600 Estimated life 6 years Estimated annual cash inflows $29,400 Estimated annual cash outflows $10,100 Salvage value for the machine is estimated to be zero. Click here to view PV table. 46 Calculate the net present value of the machine assuming a 8% discount rate. (If the net present value is negative, use either a ne ? sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor tal provided, e.g. 1.25124. Round present value answer to O decimal places, e.g. 125.) Calculate the net present value of the machine assuming a 8% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to 0 decimal places, e.g. 125.) $ Net Present Value Should the company buy the machine based on your results? Further investigation reveals that there would be a sales increase of $7,200 annually as a result of an increase in quality from the customer's perspective and a cost reduction of $2,900 annually as a result of lower warranty claims. Considering these additional facts, calculate the Net Present Value of the machine. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to decimal places, e.g. 125.) $ Net Present Value Should the company buy the machine? Save for Later Attempts: 0 of 1 used Submit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Essentials Of Finance And Accounting For Nonfinancial Managers

Authors: Edward Fields

3rd Edition

0814436943, 9780814436943

More Books

Students also viewed these Accounting questions

Question

Describe some variables used to measure the value added of HRM

Answered: 1 week ago

Question

Critically evaluate research on the HRMperformance relationship

Answered: 1 week ago