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Poe Company is considering the purchase of new equipment costing $89,000. The projected net cash flows are $44,000 for the first two years and $39.000
Poe Company is considering the purchase of new equipment costing $89,000. The projected net cash flows are $44,000 for the first two years and $39.000 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value Poe requires a 10% return on its investments. The present value of $1 and present value of an annuity of $1 for different periods is presented below. Compute the net present value of the machine. Periods Present Value of $1 a 109 0.9091 0.8264 0.7513 0.6930 Present Value of an Annuity of $1 at 108 0.9091 1.7355 .4869 Muitole Choice Multiple Choice $(35,260). $(21,196). $35,260. $21.196. $43,304
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