Mammoth Company is considering the acquisition of two machines.
Assume straight-line depreciation.Ignore income taxes.The present value of an ordinary annuity at 14% and 5 periods is 3.4331.The present value of one at 14% and 5 periods is 0.5194.
Required:
A)Calculate the net present value for both machines.
B)Which is the best alternative?

Question

Mammoth Company is considering the acquisition of two machines.
  Assume straight-line depreciation.Ignore income taxes.The present value of an ordinary annuity at 14% and 5 periods is 3.4331.The present value of one at 14% and 5 periods is 0.5194.
Required: 
A)Calculate the net present value for both machines. 
B)Which is the best alternative?

Quizplus · Accepted Answer

The Answer of Mammoth Company is considering the acquisition of two machines.
  Assume straight-line depreciation.Ignore income taxes.The present value of an ordinary annuity at 14% and 5 periods is 3.4331.The present value of one at 14% and 5 periods is 0.5194.
Required: 
A)Calculate the net present value for both machines. 
B)Which is the best alternative?

Mammoth Company Is Considering the Acquisition of Two Machines