Question: Current Attempt in Progress Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $163,500 and has an estimated

 Current Attempt in Progress Caine Bottling Corporation is considering the purchase

Current Attempt in Progress Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $163,500 and has an estimated useful life of 8 years with zero salvage value. Management estimates that the new bottling machine will provide net annual Cash flows of $30,700. Mansgement also belicves that the new botting machine will save the company money because it is expected to be more reliable than other machines, and thus will reduce downtime. Assume a discount rate of 12% Click here to view the factor table. Calculate the net present value, If the net present value is negative, use either a negative sign preceding the number es -45 or parentheses es (45). For calculation purposes, use 5 decimal places as displayed in the foctor table provided. Round present value answer to 0 decimal places, es. 125 . Netpresent value How much would the reduction in downtime have to be worth in order for the project to be acceptable? (Round answer to 0 decimal places, es 125)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!