4.A corporation is considering purchasing a machine that will save $210,000 per year before taxes. The cost of operating the machine, including maintenance, is $60,000 per year. The machine, costing $120,000, will be needed for four years after which it will have a salvage value of $16,000. If the firm wants a 12% rate of return before taxes, what is the net present value of the cash flows generated from this machine? Ans. P= $465,770.69
4.A corporation is considering purchasing a machine that will save $210,000 per year before taxes. The cost of operating the machine, including maintenance, is $60,000 per year. The machine, costing $120,000, will be needed for four years after which it will have a salvage value of $16,000. If the firm wants a 12% rate of return before taxes, what is the net present value of the cash flows generated from this machine? Ans. P= $465,770.69
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Good day! I need your help tutor please answer the question attached below. The answer is already provided, which means that will be your basis if your answers are correct or not.
Ps. In your solution, you identify the given and the what is being asked in the problem and I want to see the formula that you used and box your final answer. Don't give me a solution that is made in ms excel, I am not econ major so i'm asking for you to do the manual or the traditional computation.Lastly, don't give me a shortcut solution because i want to learn and study your computation :)
Pps. I want you to use the Present Worth Method,
Transcribed Image Text:4.A corporation is considering purchasing a machine that will save $210,000 per year before taxes. The cost of operating
the machine, including maintenance, is $60,000 per year. The machine, costing $120,000, will be needed for four years
after which it will have a salvage value of $16,000. If the firm wants a 12% rate of return before taxes, what is the net
present value of the cash flows generated from this machine? Ans. P= $465,770.69
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