Edgar Company is considering the purchase of new equipment costing $80,000. The projected net cash flows are $35,000 for the first two years and $30,000 for years three and four. The revenue is to be received at the end of each year. The machine has a useful life of 4 years and no salvage value. Edgar requires a 10% return on its investments. The present value of an annuity of 1 and present value of an annuity for different periods is presented below. Compute the net present value of the machine. 

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Present Value Present Value of an Periods of $1 at 10% Annuity of $1 at 10% 0.9091 0.9091 0.8264 1.7355 0.7513 2.4869 0.6830 3.1699 1234 Present Value Present Value of an Periods of $1 at 10% Annuity of $1 at 10% 0.9091 0.9091 0.8264 1.7355 0.7513 2.4869 0.6830 3.1699 1234

Answer rating: 100% (QA)

A D 1 Year Cash flow PVF 10 Present ... View the full answer