determine the net present value of machine.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A machine costing $49,000 is purchased by M company, which will reduce the operating expenses by $9,000
per year. The machine has a useful life of 8 years and expected to have zero salvage value at the end of its
useful life. If the company's required rate of return is 12%, then determine the net present value of machine.
Answer Choices a. $44.712 b. -$464 c. -$4,288 d. $4.288
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