Wildhorse Enterprises is considering investing in a new packing machine. The new machine will provide annual...
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Wildhorse Enterprises is considering investing in a new packing machine. The new machine will provide annual cash operating inflows of $12300 for 5 years. The cost of the machine is $42300 and it can be sold at the end of its 5-year useful life for $6800. Wildhorse's required rate of return is 10%. Type of cash flow PV of $1 FV of $1 PV ordinary annuity FV ordinary annuity PV annuity due Periods 5 5 5 5 5 Interest rate 10% 10% 10% 10% 10% Factor 0.6209 1.6105 3.7908 6.1051 4.1699 What is the machine's net present value? (round to the nearest dollar) Wildhorse Enterprises is considering investing in a new packing machine. The new machine will provide annual cash operating inflows of $12300 for 5 years. The cost of the machine is $42300 and it can be sold at the end of its 5-year useful life for $6800. Wildhorse's required rate of return is 10%. Type of cash flow PV of $1 FV of $1 PV ordinary annuity FV ordinary annuity PV annuity due Periods 5 5 5 5 5 Interest rate 10% 10% 10% 10% 10% Factor 0.6209 1.6105 3.7908 6.1051 4.1699 What is the machine's net present value? (round to the nearest dollar)
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To calculate the net present value NPV of the machine we need to determine the present value of the ... View the full answer
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324597707
12th edition
Authors: Eugene F. Brigham, Joel F. Houston
Posted Date:
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