Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.

-Calculate the total net present value for the project using a discount rate of 17%.
A)$71,762.95
B)$320,512.82
C)$796,762.95
D)$725,000.00
E)Do not have enough information to compute

Question

Fabricating Solutions is looking at the financials for a CNC machine. The expected life cycle for the machine is 6 years. The initial projected product design costs are $725,000. Fabricating Solutions typically uses a discount rate of 14% for all new product financials.
 
-Calculate the total net present value for the project using a discount rate of 17%.
A)$71,762.95 
B)$320,512.82 
C)$796,762.95 
D)$725,000.00 
E)Do not have enough information to compute

Quizplus · Accepted Answer

The correct answer is A because the net present value of the project is $71,762.95 when using a discount rate of 17%.

Fabricating Solutions Is Looking at the Financials for a CNC