Forge Company wants to purchase a new cutting machine for its sewing plant.The investment is expected to generate annual cash inflows of $120,000.The required rate of return is 10% and the current machine is expected to last for four years.What is the maximum dollar amount the company would be willing to spend for the machine,assuming its life is also four years? Income taxes are not considered.
A) $273,500
B) $460,800
C) $355,950
D) $380,280

Question

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The Answer of Forge Company wants to purchase a new cutting machine for its sewing plant.The investment is expected to generate annual cash inflows of $120,000.The required rate of return is 10% and the current machine is expected to last for four years.What is the maximum dollar amount the company would be willing to spend for the machine,assuming its life is also four years? Income taxes are not considered.
A) $273,500
B) $460,800
C) $355,950
D) $380,280

Forge Company Wants to Purchase a New Cutting Machine for Its