Anne Darrow has asked her accountant, Jack Driscoll, to determine whether her company, Kong Industries, a leader in chain manufacturing, should purchase a new machine for $100,000 that can be sold at the end of 3 years for $35,000 and during that time will generate income as follows:

Year 1: $3,000 

Year 2: $6,000 

Year 3: $12,000

She told Jack to determine her NPV with her cost of capital at 12%. What is her NPV?

Answer rating: 100% (QA)

To calculate the net present value NPV of the investment we need to discount the future cash flows g... View the full answer