Newport Corporation is considering the purchase of a new plece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $206,000. The equipment will have an initial cost of $905,000 and a 6-year life with no salvage value. If the company's cost of capital is 10%, what is the net present value? (Future Value of $1, Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1 Note: Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount. Multiple Choice 50 $(7,808) $7,808 $301,667
Newport Corporation is considering the purchase of a new plece of equipment. The cost savings from the equipment would result in an annual increase in net cash flow of $206,000. The equipment will have an initial cost of $905,000 and a 6-year life with no salvage value. If the company's cost of capital is 10%, what is the net present value? (Future Value of $1, Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1 Note: Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount. Multiple Choice 50 $(7,808) $7,808 $301,667
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 22E
Related questions
Question
4.
![Newport Corporation is considering the purchase of a new plece of equipment. The cost savings from the equipment would result in an annual increase
in net cash flow of $206,000. The equipment will have an initial cost of $905,000 and a 6-year life with no salvage value. If the company's cost of capital
is 10%, what is the net present value? (Future Value of $1, Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1
Note: Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount.
Multiple Choice
50
$(7,808)
$7,808
$301,667](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb452fae2-5441-4f77-af49-db903ef3b481%2Fcba8fef3-d6a5-494f-bd06-7aae54e00ad8%2F7olm0h7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Newport Corporation is considering the purchase of a new plece of equipment. The cost savings from the equipment would result in an annual increase
in net cash flow of $206,000. The equipment will have an initial cost of $905,000 and a 6-year life with no salvage value. If the company's cost of capital
is 10%, what is the net present value? (Future Value of $1, Present Value of $1. Future Value Annuity of $1. Present Value Annuity of $1
Note: Use appropriate factor from the PV tables. Round your final answer to the nearest dollar amount.
Multiple Choice
50
$(7,808)
$7,808
$301,667
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