Question
Please show work Market Top Investors, Inc., is considering the purchase of a $340,000 computer with an economic life of five years. The computer will
Please show work
Market Top Investors, Inc., is considering the purchase of a $340,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method, at which time it will be worth $36,000. The computer will replace two office employees whose combined annual salaries are $82,000. The machine will also immediately lower the firms required net working capital by $71,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 21 percent. The appropriate discount rate is 8 percent.
Calculate the NPV of this project. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Is it worthwhile to buy the computer? No Yes
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