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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 present
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 five years is 4.212. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Year 1 2 3 4 5 Income from Operations $18,750 18,750 18,750 18,750 18,750 Ob. $(118,145) Oc. $118,145 Od. $(19,875) Net Cash Flow $93,750 93,750 93,750 93,750 93,750 The net present value for this investment is Oa. $19,875
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