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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![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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5f065743-b8ec-4961-8a5f-a3d21449fd63%2F770e6f59-dcfd-4400-8646-81a9ee6ab9ed%2Fhh8h39h_processed.png&w=3840&q=75)
Transcribed Image Text: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?
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