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QUESTION 4 Butler Corporation is considering the purchase of new equipment costing $30,000. The projected annual after-tax net income from the equipment is $1,200, after
QUESTION 4 Butler Corporation is considering the purchase of new equipment costing $30,000. The projected annual after-tax net income from the equipment is $1,200, after deducting $10,000 for depreciation. The revenue is to be received at the end of each year. The machine has a useful life of 3 years and no salvage value. Butler requires a 12% return on its investments. The present value of an annuity of $1 for different periods follows: Penods 12% 1 0.8929 2 1.6901 3 2.4018 4 3.0373 What is the net present value of the machine? O $30,000 $26,900 $(3,100) O $(29,520) $24,018
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