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Tamarisk Corporation is considering purchasing one of two new machines. Estimates for each machine are as follows: Investment Estimated life Estimated annual cash inflows Estimated annual cash outflows Machine A Salvage value for each machine is estimated to be zero. Machine B Machine A Click here to view the factor table. Calculate the net present value of each project assuming a 6% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to O decimal places, e.g. 125.) Net Present Value $ $108,000 10 years $26,700 $5,900 $ Machine B $155,400 10 years $39,700 $9,900 Which project should the company choose?

Tamarisk Corporation is considering purchasing one of two new machines. Estimates for each machine are as follows: Investment Estimated life Estimated annual cash inflows Estimated annual cash outflows Machine A Salvage value for each machine is estimated to be zero. Machine B Machine A Click here to view the factor table. Calculate the net present value of each project assuming a 6% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to O decimal places, e.g. 125.) Net Present Value $ $108,000 10 years $26,700 $5,900 $ Machine B $155,400 10 years $39,700 $9,900 Which project should the company choose?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Tamarisk Corporation is considering purchasing one of two new machines. Estimates for each machine are as follows: Investment Estimated life Estimated annual cash inflows Estimated annual cash outflows Machine A Machine B Net Present Value Machine A Salvage value for each machine is estimated to be zero. $ $108,000 $ 10 years Click here to view the factor table. Calculate the net present value of each project assuming a 6% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to 0 decimal places, e.g. 125.) $26,700 $5,900 Machine B $155,400 Which project should the company choose? 10 years $39,700 $9,900
Transcribed Image Text:Tamarisk Corporation is considering purchasing one of two new machines. Estimates for each machine are as follows: Investment Estimated life Estimated annual cash inflows Estimated annual cash outflows Machine A Machine B Net Present Value Machine A Salvage value for each machine is estimated to be zero. $ $108,000 $ 10 years Click here to view the factor table. Calculate the net present value of each project assuming a 6% discount rate. (If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124. Round present value answer to 0 decimal places, e.g. 125.) $26,700 $5,900 Machine B $155,400 Which project should the company choose? 10 years $39,700 $9,900
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