Question
The following present value factors are provided for use in this problem. Periods Present value of $1 at 8% Present Value of an Annuity of
The following present value factors are provided for use in this problem.
Periods | Present value of $1 at 8% | Present Value of an Annuity of $1 at 8% |
| 1 | 0.9259 | 0.9259 |
| 2 | 0.8573 | 1.7833 |
| 3 | 0.7938 | 2.5771 |
| 4 | 0.7350 | 3.3121 |
Xavier Co. wants to buy a machine for $37,000 with a useful life of four years and a salvage value of $1,000. Xavier requires an 8% return on investment. The expected net cash flows at the end of the year are $12,000 in each of the four years.
What is the net present value of the machine?
Step by Step Solution
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To calculate the net present value NPV of the machine we need to find the present value PV of each c...
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Precalculus
Authors: Michael Sullivan
9th edition
321716835, 321716833, 978-0321716835
