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Assuming a discount rate of 5%, what is the incremental net present value of replacing the current machine with the new machine? OA: $-3,589 OB: $-4,774 OC: $-6,349 OD: $-8,444 OE: $-11,231 OF: $-14,937

Assuming a discount rate of 5%, what is the incremental net present value of replacing the current machine with the new machine? OA: $-3,589 OB: $-4,774 OC: $-6,349 OD: $-8,444 OE: $-11,231 OF: $-14,937

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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X Company is considering replacing one of its machines in order to save operating costs. The following information is available: Current machine Current sales value Final sales value Operating costs New machine Purchase cost Final sales value Operating costs $4,000 0 66,000 $75,000 1,000 48,000 Both machines will last for 4 more years. Assuming a discount rate of 5%, what is the incremental net present value of replacing the current machine with the new machine? OA: $-3,589 OB: $-4,774 OC: $-6,349 OD: $-8,444 OE: $-11,231 OF: $-14,937 Submit Answer Tries 0/99
Transcribed Image Text:X Company is considering replacing one of its machines in order to save operating costs. The following information is available: Current machine Current sales value Final sales value Operating costs New machine Purchase cost Final sales value Operating costs $4,000 0 66,000 $75,000 1,000 48,000 Both machines will last for 4 more years. Assuming a discount rate of 5%, what is the incremental net present value of replacing the current machine with the new machine? OA: $-3,589 OB: $-4,774 OC: $-6,349 OD: $-8,444 OE: $-11,231 OF: $-14,937 Submit Answer Tries 0/99
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