Assume that ABC company is considering purchasing a machine for $50,000 that will have a five-year useful life and a $5,000 salvage value. The machine will lower operating costs by $17,000 per year. The company's required rate of return is 19%. The net present value of this investment is:

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
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Assume that ABC company is considering
purchasing a machine for $50,000 that will
have a five-year useful life and a $5,000
salvage value. The machine will lower
operating costs by $17,000 per year. The
company's required rate of return is 19%. The
net present value of this investment is:
Transcribed Image Text:Assume that ABC company is considering purchasing a machine for $50,000 that will have a five-year useful life and a $5,000 salvage value. The machine will lower operating costs by $17,000 per year. The company's required rate of return is 19%. The net present value of this investment is:
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