Question #22

Cole Corporation's management is considering investing in (Le., purchasing) a new machine costing $490,000. Management's detired rate of retuin is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909,0.826,0751,0683, and 0.621, respectively. In add tion to the foregoing information, use the following cata about the income and cash fows that would be produced by the machine in detemining the acceptabsity of this purchase: The net present value for this imvestment is: postive $36,400 negative $319,370 negative \$16,170 posilive $28.290 positive \$473,830