Find the net present value s of the following potential purchases and projected cash flows, discounted at

Question:

Find the net present values of the following potential purchases and projected cash flows, discounted at 6 percent annually: Machine A: Purchase price = $32,000; salvage value after 8 years = $8,000; annual operating and maintenance cost = $3600. Machine B: Purchase price = $28,000; salvage value after 8 years = $10,000; annual operating and maintenance cost = $4300. Which purchase would be best?

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... Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...