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The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The
The management of Wyoming Corporation is considering the purchase of a new machine costing $375,000. The company's desired rate of return is 6%. The present value factor for an annuity of $1 at interest of 6% for 5 years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year Operating Income Net Cash Flow 1 $18,750 $93,750 2 18,750 93,750 18,750 93,750 4 18,750 93,750 5 18,750 93,750 The net present value for this investment is a. $19,875 Ob. $(19,875) Oc. $118,145 Od. $(118,145)
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