The management of Urbine Corporation is considering the purchase of a machine that would cost $330,000 wou">

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The management of Urbine Corporation is considering the purchase-(Answered)

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The management of Urbine Corporation is considering the purchase of a machine that would cost $330,000 would last for 6 years, and would have no salvage value. The machine would reduce labor and other costs by $65,000 per year. The company requires a minimum pretax return of 9% on all investment projects. (Ignore income taxes in this problem.)

The net present value of the proposed project is closest to:



Cash Flows

 

Y0

 

###

 

Minimum pretax return

 

Net present value

 


 

9.00%

 

$ (38,415.29)

 


 

Y1

 

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Y2

 

###

 


 

Y3

 

###

 


 

Y4

 

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Y5

 

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Y6

 

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Paper#9256546 | Written in 27-Jul-2016

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