A small industrial machine costs $222,000 and is expected to earn annual net cash inflows of...
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A small industrial machine costs $222,000 and is expected to earn annual net cash inflows of $74,000, $83,000, $91,000 and $81,000, before it wears out sufficiently to be unreliable and must be sold for an estimated $54,900. The discount factors based on the discount rates are as follows: Year 2 Year 3 Year 4 0.8900 0.8396 0.7972 0.7118 Discount factors Year 1 0.9434 0.8929 6% 12% 0.7921 0.6355 A small industrial machine costs $222,000 and is expected to earn annual net cash inflows of $74,000, $83,000, $91,000 and $81,000, before it wears out sufficiently to be unreliable and must be sold for an estimated $54,900. The discount factors based on the discount rates are as follows: Year 2 Year 3 Year 4 0.8900 0.8396 0.7972 0.7118 Discount factors Year 1 0.9434 0.8929 6% 12% 0.7921 0.6355
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To calculate the Net Present Value NPV we need to discount each years net cash inflows and subtract ... View the full answer
Related Book For
Accounting Business Reporting For Decision Making
ISBN: 9780730363415
6th Edition
Authors: Jacqueline Birt, Keryn Chalmers, Suzanne Maloney, Albie Brooks, Judy Oliver
Posted Date:
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