Johanna is considering purchasing a greenhouse for use in her business that will cost $25,000. She...
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Johanna is considering purchasing a greenhouse for use in her business that will cost $25,000. She anticipates selling this machine at the end of five years for $7,500. The machine is projected to produce the following cash flows: • End of year 1: $500 • End of year 2: $750 • End of year 3: $1,000 • End of year 4: $2,100 • End of year 5: $4,300 Calculate the net present value (NPV) of purchasing the machine if Johanna's opportunity cost is 10% Note: the sign (+/-) makes a difference in NPV calculations. Based on your calculations, include the appropriate sign in your answer. Johanna is considering purchasing a greenhouse for use in her business that will cost $25,000. She anticipates selling this machine at the end of five years for $7,500. The machine is projected to produce the following cash flows: • End of year 1: $500 • End of year 2: $750 • End of year 3: $1,000 • End of year 4: $2,100 • End of year 5: $4,300 Calculate the net present value (NPV) of purchasing the machine if Johanna's opportunity cost is 10% Note: the sign (+/-) makes a difference in NPV calculations. Based on your calculations, include the appropriate sign in your answer.
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Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
Posted Date:
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