Question 2-/ 10Milwaukee Machine Tool is planning to buy amachine for S15,000 with a salvage value of 20% ofthe initial cost after a life of 10 years. The companyestimates it will need $900 for supplies, $250 formaintenance, $100 for utilities and $1,500 foroverhead. They estimate these will increase by $1200,8%, 10% and $200 respectively over the 10-yearmachine life. If interest rate is 5% per year, what is thenet present value of the project?O -$78,301.032 -$82,216.083 -$93,301.03-$52,216.08

In this question we have, Milwaukee Machine Tool is planning to buy a machine for $15,000 which has…

Milwaukee Machine Tool is planning to buy a machine for S15,000 with a salvage value of 20% of the initial cost after a life of 10 years. The company estimates it will need $900 for supplies, $250 for maintenance, S100 for utilities and S1,500 for overhead. They estimate these will increase by S1200, 8%, 10% and $200 respectively over the 10-year machine life. If interest rate is 5% per year, what is the net present value of the project?

Milwaukee Machine Tool is planning to buy a machine for S15,000 with a salvage value of 20% of the initial cost after a life of 10 years. The company estimates it will need $900 for supplies, $250 for maintenance, S100 for utilities and S1,500 for overhead. They estimate these will increase by S1200, 8%, 10% and $200 respectively over the 10-year machine life. If interest rate is 5% per year, what is the net present value of the project?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Milwaukee Machine Tool is planning to buy a machine for S15,000 with a salvage value of 20% of the initial cost after a life of 10 years. The company estimates it will need $900 for supplies, $250 for maintenance, $100 for utilities and S1,500 for overhead. They estimate these will increase by S1200, 8%, 10% and $200 respectively over the 10-year machine life. If interest rate is 5% per year, what is the net present value of the project? -$78,301.03 2 -$82,216.08 3 -$93,301.03 -$52,216.08
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