Dane Cosmetics is evaluating a new fragrancemixing machine. The machine requires an initial investment of $24,000 and

Question:

Dane Cosmetics is evaluating a new fragrancemixing machine. The machine requires an initial investment of $24,000 and will generate after-tax cash inflows of $5,000 per year for 8 years. For each of the costs of capital listed,
(1) Calculate the (NPV),
(2) Indicate whether to accept or reject the machine, and
(3) Explain your decision.
a. The is 10%.
b. The is 12%.
c. The is 14%.

Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...