Question
Sigma is thinking of buying a new clam digger for $12,000. The expected net cash flows from the excavator are $9,000 in year 1, $7,000
Sigma is thinking of buying a new clam digger for $12,000. The expected net cash flows from the excavator are $9,000 in year 1, $7,000 in year 2, $5,000 in year 3, and $3,000 in year 4. Should Sigma purchase this excavator if its cost of ownership principal is 8%?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine whether Sigma should purchase the clam digger we need to calculate the Net Present Valu...
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Step: 2
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Introductory Financial Accounting for Business
Authors: Thomas Edmonds, Christopher Edmonds
1st edition
1260299449, 978-1260299441
