(Present value tables are required. )Interior Products,Inc.is evaluating the purchase of a new machine to use in its manufacturing process.The new machine would cost $41,000 and have a useful life of 6 years.At the end of the machine's life,it would have a residual value of $2,500.Annual cost savings from the new machine would be $12,400 per year for each of the six years of its life.Interior Products,Inc.has a minimum required rate of return of 16% on all new projects.The net present value of the new machine would be closest to

Question

Quizplus · Accepted Answer

B)
Cost of Equipment $-41,000
Residual value 2,500
PV 16% 6 yrs 0.410 1,025
Annual Expense 12,400
PFA 16% 6 yrs 3.685 45,694
Total 5,719

(Present Value Tables Are Required