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TThis question has been asked before but neither solutions explain how the $45,263 value comes from. or at least i still don't understand how the
TThis question has been asked before but neither solutions explain how the $45,263 value comes from. or at least i still don't understand how the value come out. In one solution it shows a Add: Reduction in down time Present Value, which i have no idea how to calculate that value. Anyone can help out? please and thank you!
Question 28 Correct 1.00 points out of 1.00 Miles, Inc. is considering the purchase of a new machine for $600,000 that has an estimated useful life of 5 years and no salvage value. The machine will generate net annual cash flows of $105,000. It is believed that the new machine will reduce downtime because of its reliability Assume the discount rate is 8% In order to make the project acceptable, the reduction in downtime must be worth Present Value PV of an Annuity otlat5% 926 1.783 2.577 3.312 3.993 Year Remove flag 926 857 794 735 681 4 Select one a. $23,958 per year b. $49,662 per year c. $18,264 per year d. $45,263 per yearCorrect The correct answer is: $45,263 per yearStep by Step Solution
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