Jacob manages a cloth manufacturing firm. He is deciding whelher of nol machinery costs $45,000 today and is expected to Increase cash flows in the firet year by $25,000 and in the second year by $30,000. The firm's accrued fixed costs are $2800. If the interest rate (cost of capital) is 15% then whal is the net present value of the investment? O 26.09 O 1840.09 2826.09
Jacob manages a cloth manufacturing firm. He is deciding whelher of nol machinery costs $45,000 today and is expected to Increase cash flows in the firet year by $25,000 and in the second year by $30,000. The firm's accrued fixed costs are $2800. If the interest rate (cost of capital) is 15% then whal is the net present value of the investment? O 26.09 O 1840.09 2826.09
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Jacob manages a cloth manufacturing firm. He is deciding whether or not to invest In new machinery, The
machinery costs $45,000 today and is expected to Increase cash lows in the first year by $25,000 and in
the second year by $30,000. The firm's accrued fixed costs are $2800. If the interest rate (cost of capital) is
15% then whal is the net present value of the investment?
26.09
O 1840.09
2826.09
-576.56](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff44ec223-6dc5-43f1-9032-0cdd0dd26286%2Fe90c1251-6707-4294-8b79-2f90310e769c%2Fwwmhj5u_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Jacob manages a cloth manufacturing firm. He is deciding whether or not to invest In new machinery, The
machinery costs $45,000 today and is expected to Increase cash lows in the first year by $25,000 and in
the second year by $30,000. The firm's accrued fixed costs are $2800. If the interest rate (cost of capital) is
15% then whal is the net present value of the investment?
26.09
O 1840.09
2826.09
-576.56
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