You are buying a machine with a down payment of $200,000 and annual payments of $40,000 per year for 20 years. The interest rate is 9% and the salvage value at 20 years is $50,000. Also consider maintenance of $2000 each year. a) What is present value of all costs for the machine? b) The annual income expected from the machine is now $80,000. What is net present value of th income for the machine?

You are buying a machine with a down payment of $200,000 and annual payments of $40,000 per year for 20 years. The interest rate is 9% and the salvage value at 20 years is $50,000. Also consider maintenance of $2000 each year. a) What is present value of all costs for the machine? b) The annual income expected from the machine is now $80,000. What is net present value of th income for the machine?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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