Question
Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $317,000 per year. You believe the
Your company is deciding whether to invest in a new machine. The new machine will increase cash flow by $317,000 per year. You believe the technology used in the machine has a 10-year life; in other words, no matter when you purchase the machine, it will be obsolete 10 years from today. The machine is currently priced at $1,700,000. The cost of the machine will decline by $108,000 per year until it reaches $1,160,000, where it will remain.
The NPV is correct at 20119.18,
If your required return is 13 percent, calculate the NPV if you wait to purchase the machine until the indicated year.?
year 1- NPV year 2- NPV year 3_ NPV year 4- NPV year 5- NPV year 6- NPV |
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