Sigma is thinking of buying a new clam digger for $12,000. The expected net cash flows from the excavator are $9,000 in year 1, $7,000 in year 2, $5,000 in year 3, and $3,000 in year 4. Should Sigma purchase this excavator if its cost of ownership principal is 8%?

Answer rating: 100% (QA)

To determine whether Sigma should purchase the clam digger we need to calculate the Net Present Valu... View the full answer