Question 12

OS 24-12 (Algo) Net present value analysis with salvage value; no present value calculations LO P3 A company is considering two alternative machines with different net cash flows and salvage values. Present value amounts are calculated using Excel and the results follow. Potential Machine Tavasthants Frenent value of net cash flows (excluding initial investnent and sivage) $ 21,702 26,200 Prenent value of net cash flow from salvage value 3,900 732 Initial investment (21,800) (21,600) a. Compute the net present value of each machine A and B b. If the company can choose only one machine, which will it choose on the basis of net present value? Complete this question by entering your answers in the tabs below. Required A Required B Compute the net present value of each machine A and B. Present value of net cash flows Present value of net cash flow from salvage value Total Initial investment Net present value Required 8 >