Question
Sheridan Company owns a garage and is contemplating purchasing a tire retreading machine for $14,820. After estimating costs and revenues, Sheridan projects a net cash
Sheridan Company owns a garage and is contemplating purchasing a tire retreading machine for $14,820. After estimating costs and revenues, Sheridan projects a net cash inflow from the retreading machine of $2,900 annually for 7 years. Sheridan hopes to earn a return of 7% on such investments. What is the present value of the retreading operation? (For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 5.27541. Round answer to 2 decimal places, e.g. 25.25.) Present value $enter the present value amount in dollars Should Sheridan Company purchase the retreading machine? Sheridan Company select an option purchase the tire retreading machine.
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