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The managemet of Arkansas Corperation is considerng the pardhane ofa new achne cting 490,000. The campny's deed rate of returs is 1 The preset veke

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The managemet of Arkansas Corperation is considerng the pardhane ofa new achne cting 490,000. The campny's deed rate of returs is 1 The preset veke ftors or a compund iterest of 10% for t theough 5 years are 0.909, aR26, 0.751, 0.1, ard D.621, respectively. In addin to the foregoing iformon, e the fellowing data in deteiing thw acceptabty af thes investment Operating Net Cash Year Income S100,000 $100,000 40,000 12000 40,000 100,000 4. 10.000 90,000 10,000 120.000 The ret present vakue for ths ietst is On sc10 Oc S6,00 Od. s6on) The management of Arkansas Corporation is considering the purchase of a new machine costing $490,000. The company's desired rate of return is 10%. The present value factors for $1 at compound interest of 10% for 1 through 5 years are 0.909, 0.826, 0.751, 0.683, and 0.621, respectively. In addition to the foregoing information, use the following data in determining the acceptability of this investment: Operating Net Cash Year Income Flow $100,000 $180,000 40,000 120,000 40,000 100,000 10,000 90,000 10,000 120,000 The net present value for this investment is Oa s55,200 Ob. s(16,170) Oc $36,400 Od. $(126,800)

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