Palatial Products Inc. is considering the purchase of a new industrial machine. The estimated cost of the machine is $190,000. The machine is expected to generate annual cash inflows for the next four years as follows:
The machine is not expected to have a residual value at the end of its useful life. The company uses a discount rate of 10%.
Required: Compute the net present value of the machine. (Ignore income taxes)

Question

Palatial Products Inc. is considering the purchase of a new industrial machine. The estimated cost of the machine is $190,000. The machine is expected to generate annual cash inflows for the next four years as follows:
  The machine is not expected to have a residual value at the end of its useful life. The company uses a discount rate of 10%.
Required: Compute the net present value of the machine. (Ignore income taxes)

Quizplus · Accepted Answer

The Answer of Palatial Products Inc. is considering the purchase of a new industrial machine. The estimated cost of the machine is $190,000. The machine is expected to generate annual cash inflows for the next four years as follows:
  The machine is not expected to have a residual value at the end of its useful life. The company uses a discount rate of 10%.
Required: Compute the net present value of the machine. (Ignore income taxes)