The management of Fine Electronics Company is considering to purchase an equipment to be attached with the main manufacturing machine. The equipment will cost 6000and will increase annual cash inflow by 2500 the working capital 300 . The useful life of the equipment is 6 years. After 6 years it will have no salvage value. the equipment at the end the 6 year can be sold for 250 net of taxes The management wants a 8% return on all investments.

what is the initial investment

Answer for part 1

what is the total discounted cash flow

Answer for part 2

what is the terminal value

Answer for part 3

what is the net present value