A company is considering the purchase of new equipment for $42,000.The projected annual cash inflow is $18,000.The machine has a useful life of 3 years and no salvage value.Management of the company requires a 12% return on investment.The present value of an annuity of $1 for various periods follows:
What is the net present value of this machine assuming all cash flows occur at year-end?

Question

A company is considering the purchase of new equipment for $42,000.The projected annual cash inflow is $18,000.The machine has a useful life of 3 years and no salvage value.Management of the company requires a 12% return on investment.The present value of an annuity of $1 for various periods follows:
  What is the net present value of this machine assuming all cash flows occur at year-end?

Quizplus · Accepted Answer

The Answer of A company is considering the purchase of new equipment for $42,000.The projected annual cash inflow is $18,000.The machine has a useful life of 3 years and no salvage value.Management of the company requires a 12% return on investment.The present value of an annuity of $1 for various periods follows:
  What is the net present value of this machine assuming all cash flows occur at year-end?

A Company Is Considering the Purchase of New Equipment for $42,000.The