Cliff Co. wants to buy a machine for $68,000, but needs to earn an 8% return.The expected
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Question:
Cliff Co. wants to buy a machine for $68,000, but needs to earn an 8% return. The expected net cash flows at the end of the year are $27,000 in each of the first three years and $31,000 in the fourth year. What is the net present value of the machine (rounded to the nearest whole dollar)?
Periods | Present value from 1 to 8% | Present value of an annuity from 1 to 8% |
1 | 0.9259 | 0.9259 |
2 | 0.8573 | 1.7833 |
3 | 0.7938 | 2.5771 |
4 | 0.7350 | 3.3121 |
Related Book For
Contemporary Financial Management
ISBN: 9780324289114
10th Edition
Authors: James R Mcguigan, R Charles Moyer, William J Kretlow
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