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

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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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
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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