Redman Company is considering an investment in new machinery. The details of the investment are as follows: Cost of the machinery $280.000 Annual cash flows $80.000 Useful life 4 years The company uses straight-line depreciation for its machinery and requires a 12% rate of return. The present value of $1 for 4 years at 12% is 0.636. The present value of an ordinary annuity for $1 for 4 years at 12% is 3.037 What is the net present value of this investment? Write the calculation

Answer rating: 100% (QA)

To calculate the net present value NPV of the investment we need to find the present value of the an... View the full answer