ni.3 Nevland Corporation is considering the purchase of a machine that would cost $120, 000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $43,000. The company requires a minimum pretax return of 19% on all investment projects. The net present value of the proposed project is closest A) $32,966 B) $26,376 C) $64,902 D) $30,040
ni.3 Nevland Corporation is considering the purchase of a machine that would cost $120, 000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $43,000. The company requires a minimum pretax return of 19% on all investment projects. The net present value of the proposed project is closest A) $32,966 B) $26,376 C) $64,902 D) $30,040
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 4P
Related questions
Question
ni.3
Nevland Corporation is considering the purchase of a machine that would
cost $120, 000 and would last for 6 years. At the end of 6 years, the machine
would have a salvage value of $18,000. By reducing labor and other
operating costs, the machine would provide annual cost savings of $43,000. The company requires a minimum pretax return of 19% on all investment projects. The
A) $32,966
B) $26,376
C) $64,902
D) $30,040
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