Question: HT Tech wants to purchase a $130,000 machine. The machine will last 10 years, be paid off in 6 years, and have no salvage value

 HT Tech wants to purchase a $130,000 machine. The machine will

HT Tech wants to purchase a $130,000 machine. The machine will last 10 years, be paid off in 6 years, and have no salvage value at the end of its life. Net annual cash flows are $24,000, the discount factor is 12%, and the present value of cash flows is $135,605. Per the net present value (NPV) method, the purchase is acceptable for HT What was the determining factor in this decision? The NPV was less than the purchase price. O The NPV of cash flows was positive The cash payback period was shorter than the expected life. The discount rate was under 15%

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!