The production department is proposing the purchase of an automatic insertion machine. It has identified 3 machines and have asked the accountant to analyze them to determine which of the proposals (if any) meet or exceed the company's policy of a minimum desired rate of return of 10% using the net present value method. Each of the assets has an estimated useful life of 10 years. The accountant has identified the following data:

Which of the investments are acceptable?

Machines B & C

Machines A & C

Machines B only

Machines A only

Transcribed Image Text:

Present value of future cash flows computed using 10% rate of return Amount of initial investment Machine A $305,000 300,000 Machine B $295,000 300,000 Machine $300,000 300,000 Present value of future cash flows computed using 10% rate of return Amount of initial investment Machine A $305,000 300,000 Machine B $295,000 300,000 Machine $300,000 300,000

Answer rating: 100% (QA)

Statement showing computations Particulars Machine A Machine B Machine C Present Value ... View the full answer