Question

Assume ABC wants to invest in a machine costing P 80,000 with a useful life of six years and no salvage value. The machine will be depreciated using the straight-line method and is expected to produce annual cash inflow from operations, net of income taxes of P 22,000. The present value of an ordinary annuity of P1 for six periods at 10% is 4.355. The present value of P1 for six periods at 10% is 0.564. ABC wants a minimum rate of return of 10%, what is the net present value of this proposed investment? Is the propose investment acceptable? Why or why not?​

Answer 1

Answer:

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