You are a financial analyst for a company considering the purchase of a new piece of equipment.
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Question:
You are a financial analyst for a company considering the purchase of a new piece of equipment. The equipment costs $100,000 and has an expected life of 5 years, at which point it can be sold for $20,000. The company expects to generate an additional $30,000 per year in revenue for the next 5 years if it purchases the equipment. The company's cost of capital is 10%. Should the company purchase the equipment?
Related Book For
Financial Analysis with Microsoft Excel
ISBN: 978-1285432274
7th edition
Authors: Timothy R. Mayes, Todd M. Shank
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