Mendocino Company is contemplating the acquisition of a new copier that will cost the company $10,900.The copier is expected to last 6 years,after which it will be discarded.Mendocino's cost of capital is 9%,and the copier is expected to reduce annual cash expenditures by the following amounts:
Ignoring income taxes,determine the net-present-value of the investment in the copier.Should Mendocino purchase the copier?

Question

Mendocino Company is contemplating the acquisition of a new copier that will cost the company $10,900.The copier is expected to last 6 years,after which it will be discarded.Mendocino's cost of capital is 9%,and the copier is expected to reduce annual cash expenditures by the following amounts:
  Ignoring income taxes,determine the net-present-value of the investment in the copier.Should Mendocino purchase the copier?

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The Answer of Mendocino Company is contemplating the acquisition of a new copier that will cost the company $10,900.The copier is expected to last 6 years,after which it will be discarded.Mendocino's cost of capital is 9%,and the copier is expected to reduce annual cash expenditures by the following amounts:
  Ignoring income taxes,determine the net-present-value of the investment in the copier.Should Mendocino purchase the copier?

Mendocino Company Is Contemplating the Acquisition of a New Copier