Question: Township is thinking about adding another machine to create phone cases. The machine would cost 300,000. It would have an estimated life of 8 years

Township is thinking about adding another machine to create phone cases. The machine would cost 300,000. It would have an estimated life of 8 years and no salvage value. Township estimates that annual cash inflows would increase 50,000 and that annual cash outflows would increase by 30,000. Management has required rate of return of 6%.

Calculate the net present value on this and whether it is a good investment.

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