Question: How would your computations in requirement 1 be affected if the special - purpose machine had a $ 1 5 comma 0 0 0 $
How would your computations in requirement be affected if the specialpurpose machine had a
$ comma $
terminal disposal value at the end of
years Assume depreciation deductions are based on the
$ comma $
purchase cost and zero terminal disposal value using the straightline method. Answer briefly in words without further calculations.
Part
Part
Part
NPV would
increase
because the disposal value
results in an increase in the total present value of cash inflows.
Payback would
not change
because the disposal value
does not affect cash flows until the end of year
IRR would
increase
because the disposal value
results in an additional cash inflow.
AARR would
increase
because the disposal value
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