The Magic Company is considering buying a new machine for one of its factories. The machine cost
Fantastic news! We've Found the answer you've been seeking!
Question:
The Magic Company is considering buying a new machine for one of its factories. The machine cost is $125,000, and its expected life span is 8 years. The machine will be depreciated on the straight-line basis to a salvage value of zero; nevertheless, the company anticipates that it can sell the machine at the end of year 8 for $12,000. The machine is expected to reduce the production costs by $35,000 annually. If the appropriate discount rate is 12% and the corporate tax is 40%:
a. Calculate the project’s NPV
b. Calculate the project’s IRR.
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date: