Question: ( PROJECT MANAGEMENT ) Net present value method :- Sunlight company needs a machine for its manufacturing process. The cost of the new machine is

(PROJECT MANAGEMENT)

Net present value method :-

Sunlight company needs a machine for its manufacturing process. The cost of the new machine is $80,700. The expected useful life of the machine is 8 years. At the end of 8-year period, the machine would have no salvage value. After installation, the machine would increase cash inflows by $30,000 per year. Sunlight is interested to know the net present value of the machine to accept or reject this investment. The minimum required rate of return of the company is 16% on all capital investments.

Required :-

- Is it acceptable to purchase the machine?.

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