Question
This company is considering the purchase of a new machine costing $430,000. Their rate of return is 10%. The present value factors for $1 at
This company is considering the purchase of a new machine costing $430,000. Their rate of return is 10%. The present value factors for $1 at compount interest of 10% for 1 thru 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 to determine the acceptability in this situation: Year 1 had income from operations of $100,000 and Net Cash Flow of $180,000 Year 2 " " " " " 40,000 " " " " " 120,000 Year 3 20,000 100,000 Year 4 10,000 90,000 Year 5 10,000 90,000 What is the net present value for this investment?
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