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(Ignore income taxes in this problem.) Sibble Corporation is considering the purchase of a machine that would cost $370,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $52,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $78,000. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to:

(Ignore income taxes in this problem.) Sibble Corporation is considering the purchase of a machine that would cost $370,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $52,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $78,000. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to:

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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(Ignore income taxes in this problem.) Sibble Corporation is considering the purchase of a machine that would cost $370,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $52,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $78,000. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to:
Transcribed Image Text:(Ignore income taxes in this problem.) Sibble Corporation is considering the purchase of a machine that would cost $370,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $52,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $78,000. The company requires a minimum pretax return of 12% on all investment projects. The net present value of the proposed project is closest to:
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