A company can purchase a machine, which would yield net revenues of 5 0 , 0 0 0 5 0 , 0 0 0 pa over the first two years and then 4 0 , 0 0 0 4 0 , 0 0 0 p a for a further two years After these four years of operation the machine can be scrapped for 1 0 , 0 0 0 1 0 , 0 0 0 Using NP as the criterion ...

A company can purchase a machine, which would yield net revenues of 5 0 , 0 0

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Question:

A company can purchase a machine, which would yield net revenues of

50, 000

.

over the first two years and then

40, 000

.

.

for a further two years. After these four years of operation the machine can be scrapped for

10, 000 .

Using NP as the criterion when a discounting rate of

10 %

.

.

is in operation, what is the maximum price that the company would be prepared to pay for such a machine?Note: Perform all the calculations without rounding any intermediate results. Round your final answer to two decimal places.

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Frank Woods Business Accounting Volume 2

ISBN: 9781292085050

13th Edition

Authors: Frank Wood, Alan Sangster

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Posted Date: Jan 27, 2024 05:43 AM

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A company can purchase a machine, which would yield net revenues of 5 0 , 0 0

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Here are the calculations without rounding any intermediate results Yea... View the full answer

Frank Woods Business Accounting Volume 2

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