ABC Company has purchased a new machine costing $49,000 and the machine is expected to reduce the operating expenses by $9,000 every year. The useful life of machine is 8 years and the machine is expected to have a zero-scrap value at the end of its useful life. The company's required rate of return is 12%. Calculate the Net Present Value (NPV) of the machine. (Round intermediate calculations to 3 decimal places and final answer to the nearest dollar.) a. $44,712 b. -$464 c. -$4,288 d. $4,288
ABC Company has purchased a new machine costing $49,000 and the machine is expected to reduce the operating expenses by $9,000 every year. The useful life of machine is 8 years and the machine is expected to have a zero-scrap value at the end of its useful life. The company's required rate of return is 12%. Calculate the Net Present Value (NPV) of the machine. (Round intermediate calculations to 3 decimal places and final answer to the nearest dollar.) a. $44,712 b. -$464 c. -$4,288 d. $4,288
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 3P
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![ABC Company has purchased a new machine costing $49,000 and the machine is expected to
reduce the operating expenses by $9,000 every year. The useful life of machine is 8 years and
the machine is expected to have a zero-scrap value at the end of its useful life. The company's
required rate of return is 12%. Calculate the Net Present Value (NPV) of the machine. (Round
intermediate calculations to 3 decimal places and final answer to the nearest dollar.)
a. $44,712
b. -$464
c. -$4,288
d. $4,288](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3c2ec9f6-45b1-4266-957b-1eea570237ec%2Fe317b3a8-2b32-4b2c-b585-a655d64d9485%2Fbvvjr7b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:ABC Company has purchased a new machine costing $49,000 and the machine is expected to
reduce the operating expenses by $9,000 every year. The useful life of machine is 8 years and
the machine is expected to have a zero-scrap value at the end of its useful life. The company's
required rate of return is 12%. Calculate the Net Present Value (NPV) of the machine. (Round
intermediate calculations to 3 decimal places and final answer to the nearest dollar.)
a. $44,712
b. -$464
c. -$4,288
d. $4,288
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