Question: Please calculate the net present value of each project assuming a 6 % discount rate. Aliara Corporation is considering purchasing one of two new machines.

Please calculate the net present value of each project assuming a 6 % discount rate.

Aliara Corporation is considering purchasing one of two new machines. Estimates for

Aliara Corporation is considering purchasing one of two new machines. Estimates for each machine are as follows: ne AMach,ne B Investment Estimated life Estimated annual cash inflows Estimated annual cash outflows $108,000 10 years $26,700 $5,900 $155,400 10 years $39,700 $g,goo Salvage value for each machine is estimated to be zero. Click here to view PV table. Calculate the net present value of each project assuming a 5% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to O decimal places, e.g. 125.) Net Present Val Machine A Machine B Which project should the company choose?

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!