Ivanhoe Corporation is considering buying a brand new machine and has gathered the following data: Investment Estimated life Estimated annual cash inflows $104,800 5 years $29,900 Estimated annual cash outflows $10,000 Salvage value for the machine is estimated to be zero. Click here to view the factor table. Calculate the net present value of the machine assuming a 8% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to O decimal places, e.g. 125.) Net Present Value $ Should the company buy the machine based on your results?

Ivanhoe Corporation is considering buying a brand new machine and has gathered the following data: Investment Estimated life Estimated annual cash inflows $104,800 5 years $29,900 Estimated annual cash outflows $10,000 Salvage value for the machine is estimated to be zero. Click here to view the factor table. Calculate the net present value of the machine assuming a 8% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg-45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to O decimal places, e.g. 125.) Net Present Value $ Should the company buy the machine based on your results?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 15E: Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided...

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