Crane Enterprises is considering investing in a new packing machine. The new machine will provide annual cash
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Question:
Crane Enterprises is considering investing in a new packing machine. The new machine will provide annual cash operating inflows of $10086 for 5 years. The cost of the machine is $34686 and it can be sold at the end of its 5-year useful life for $5576. Crane's required rate of return is 10%.
Type of cash flow | Periods | Interest rate | Factor |
---|---|---|---|
PV of $1 | 5 | 10% | 0.6209 |
FV of $1 | 5 | 10% | 1.6105 |
PV ordinary annuity | 5 | 10% | 3.7908 |
FV ordinary annuity | 5 | 10% | 6.1051 |
PV annuity due | 5 | 10% | 4.1699 |
What is the machine's net present value? (round to the nearest dollar)
$7010
($86)
$13548
$10172
Related Book For
Smith and Roberson Business Law
ISBN: 978-0538473637
15th Edition
Authors: Richard A. Mann, Barry S. Roberts
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