DON Corp. is contemplating the purchase of a machine that will produce cash savings of $29,000 per year for five years. At the end of five years, the machine can be sold to realize cash flows of $5,900. Interest is 11%. Assume the cash flows occur at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the total present value of the cash savings.
DON Corp. is contemplating the purchase of a machine that will produce cash savings of $29,000 per year for five years. At the end of five years, the machine can be sold to realize cash flows of $5,900. Interest is 11%. Assume the cash flows occur at the end of each year. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: Calculate the total present value of the cash savings.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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12. DON Corp. is contemplating the purchase of a machine that will produce cash savings of $29,000 per year for five years. At the end of five years, the machine can be sold to realize
Required:
Calculate the total present value of the cash savings. (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
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