HI Corporation is considering the purchase of a machine that promises to reduce operating costs by the same amount for every year of its 6-year useful life. The machine will cost $208,780 and has no salvage value. The machine has a 14% internal rate of return. (Ignore income taxes.) Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Required: What are the annual cost savings promised by the machine? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Annual cost savings 2$ 53,685
HI Corporation is considering the purchase of a machine that promises to reduce operating costs by the same amount for every year of its 6-year useful life. The machine will cost $208,780 and has no salvage value. The machine has a 14% internal rate of return. (Ignore income taxes.) Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. Required: What are the annual cost savings promised by the machine? (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Annual cost savings 2$ 53,685
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
Section: Chapter Questions
Problem 1PS
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![HI Corporation is considering the purchase of a machine that promises to reduce operating costs by the same amount for every year
of its 6-year useful life. The machine will cost $208,780 and has no salvage value. The machine has a 14% internal rate of return.
(Ignore income taxes.)
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.
Required:
What are the annual cost savings promised by the machine? (Round your intermediate calculations and final answer to the nearest
whole dollar amount.)
Annual cost savings
2$
53,685](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4174c3e9-54a7-4636-ad43-486a92ae5b49%2F8fb274fe-636b-42d6-9802-18167c725ee2%2Ffas5nzi_processed.jpeg&w=3840&q=75)
Transcribed Image Text:HI Corporation is considering the purchase of a machine that promises to reduce operating costs by the same amount for every year
of its 6-year useful life. The machine will cost $208,780 and has no salvage value. The machine has a 14% internal rate of return.
(Ignore income taxes.)
Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided.
Required:
What are the annual cost savings promised by the machine? (Round your intermediate calculations and final answer to the nearest
whole dollar amount.)
Annual cost savings
2$
53,685
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