(Present value tables are required. )Maersk Metal Stamping is analyzing a special investment project.The project will require the purchase of two machines for $30,000 and $8,000 (both machines are required).The total residual value at the end of the project is $1,500.The project will generate cash inflows of $11,000 per year over its 8-year life.If Maersk requires a 6% return,what is the net present value (NPV)of this project?

Question

Quizplus · Accepted Answer

D)Year(s)Amount Factor Present value
Initial investment
in equipment Now $(30,000)1.000 $(30,000)
Additional equipment
needed Now $(8,000)1.000 $(8,000)
Annual net cash inflow 1 to 8 $11,000 6.210 $68,310
Residual value 8 $1.500 0.627 $940.50
Net present value $31,250.50

(Present Value Tables Are Required