MPS Industries is considering the purchase of equipment costing $100,000.00 having a seven-year useful life. Projected net
Question:
MPS Industries is considering the purchase of equipment costing $100,000.00 having a seven-year useful life. Projected net cash flows from the investment are shown below. Determine the net present value of the investment, assuming a rate of return of 12%. Should the company purchase the equipment?
Instructions:
1. Calculate the net present value of the investment.
2. Should MPS Industries purchase the equipment? Explain your answer.
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Gauri Hendre
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