The Train Co. can purchase a new machine for $30,000 that will provide net cash inflows of
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The Train Co. can purchase a new machine for $30,000 that will provide net cash inflows of $12,000 for five years, after which the machine will be sold for junk for $1,500. The present value of $1 at 12% received after 5 periods is 0.56743, and the present value of an annuity of $1 for 5 periods at 12% is 3.60478.
Calculate the net present value of the new machine if the required rate of return is 12%.
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Related Book For
Management Accounting
ISBN: 9780077185534
6th Edition
Authors: Will Seal, Carsten Rohde, Ray Garrison, Eric Noreen
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