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Rooney, Incorporated is considering the purchase of a new machine costing $720,000. The machine's useful life is expected to be 9 years with no
Rooney, Incorporated is considering the purchase of a new machine costing $720,000. The machine's useful life is expected to be 9 years with no salvage value. The straight-line depreciation method will be used. The net increase in annual after-tax cash flow is expected to be $141,000. Rooney estimates its cost of capital to be 10%. (The present value of a $1 annuity for 9 years at 10% is 5.759, and the present value of $1 to be received in 9 years is 0.424.) The net present value of the investment in the machine under consideration is: Multiple Choice $164,280. $141,000. $80,000. 71 years is 0.424.) The net present value of the investment in the machine under consideration is: 1.33 points 801.33.54 Multiple Choice $164,280 $141,000. $80,000. $92,019.
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