Question

ABC Company has purchased a new machine costing $49,000 and the machine is expected to
reduce the operating expenses by $9,000 every year. The useful life of machine is 8 years and
the machine is expected to have a zero-scrap value at the end of its useful life. The company's
required rate of return is 12%. Calculate the Net Present Value (NPV) of the machine. (Round
intermediate calculations to 3 decimal places and final answer to the nearest dollar.)
a. $44,712
b. $464
c. -$4,288
d. $4,288​

Answer 1

Answer:

K Company has purchased a new machine costing $27,000 and the machine is expected to reduce the operating expenses by $7,000 every year. The useful life of machine is 5 years and the machine is expected to have a zero scrap value at the end of its useful life. The company's required rate of return is 12%. Calculate the Net Present Value (NV) of the machine. (Round intermediate calculations to 3 decimal places and final answer to the nearest dollar.) a. $25,235 b.-$464 C.-$1,765 d. $1765

Step-by-step explanation: