8. Assuming a discount rate of 7%, what is the net present value of buying the new machine? A: $-43,411 B: $-50,791 C: $-59,425 D: $-69,528|O E: $-81,348 OF: $-95,177 Submit Answer Tries 0/99 9. If the new machine will last for six years instead of four, what is the approximate internal rate of return of buying it? A: 0.03 B: 0.04 C: 0.05 D: 0.06 E: 0.07 F: 0.08
8. Assuming a discount rate of 7%, what is the net present value of buying the new machine? A: $-43,411 B: $-50,791 C: $-59,425 D: $-69,528|O E: $-81,348 OF: $-95,177 Submit Answer Tries 0/99 9. If the new machine will last for six years instead of four, what is the approximate internal rate of return of buying it? A: 0.03 B: 0.04 C: 0.05 D: 0.06 E: 0.07 F: 0.08
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
Related questions
Question
Do both parts
Otherwise surely downvote
Transcribed Image Text:X Company is considering the purchase of a new machine. The machine would reduce the amount of part-time labor, at a cost savings of $19,280 per year. In addition, the machine would enable the company to
increase production and sales of one of its products by 2,300 units; contribution margin of this product is $5.30 per unit. The machine would cost $150,000, last for four years, and have zero salvage value at the
end of its life.
8. Assuming a discount rate of 7%, what is the net present value of buying the new machine?
A: $-43,411|
B: $-50,791OC: $-59,425
D: $-69,528
E: $-81,348
F: $-95,177
Submit Answer
Tries 0/99
9. If the new machine will last for six years instead of four, what is the approximate internal rate of return of buying it?
А: 0.03
B: 0.04
C: 0.05
D: 0.06
E: 0.07
F: 0.08
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education