Vineyard Company is proposing to spend $138000 to purchase a machine that will provide annual cash flows of $25000. The appropriate present value factor for 10 periods is 5.65.
Instructions
Compute the proposed investment's net present value and indicate whether the investment should be made by Vineyard Company.

Question

Quizplus · Accepted Answer

The Answer of Vineyard Company is proposing to spend $138000 to purchase a machine that will provide annual cash flows of $25000. The appropriate present value factor for 10 periods is 5.65.
Instructions
Compute the proposed investment's net present value and indicate whether the investment should be made by Vineyard Company.

Vineyard Company Is Proposing to Spend $138000 to Purchase a Machine