A local merchant is considering the purchase of a new machine which has an initial cost of $65,000. Annual operating cash inflows are expected to be $12,500 each year for ten years. No salvage value is expected at the end of the machine's life. The company's cost of capital is 11 percent.
Required: Compute the net present value of the machine. (Ignore income taxes)

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The Answer of A local merchant is considering the purchase of a new machine which has an initial cost of $65,000. Annual operating cash inflows are expected to be $12,500 each year for ten years. No salvage value is expected at the end of the machine's life. The company's cost of capital is 11 percent.
Required: Compute the net present value of the machine. (Ignore income taxes)

A Local Merchant Is Considering the Purchase of a New