Memphis Co.is considering purchasing a machine for $83,200 that will increase cash flows by $40,000 in the first year,$30,000 the second year,and $25,000 the third year.The machine will have no residual value.The minimum rate of return is 10 percent.The present value factors,at 10 percent,for the three years are 0.909,0.826,and 0.751,respectively.
-Using the above information for Memphis,the machine's net present value is
A)$21,800.
B)($3,285).
C)$79,915.
D)($4,286).

Question

Memphis Co.is considering purchasing a machine for $83,200 that will increase cash flows by $40,000 in the first year,$30,000 the second year,and $25,000 the third year.The machine will have no residual value.The minimum rate of return is 10 percent.The present value factors,at 10 percent,for the three years are 0.909,0.826,and 0.751,respectively. 
-Using the above information for Memphis,the machine's net present value is
A)$21,800.
B)($3,285).
C)$79,915.
D)($4,286).

Quizplus · Accepted Answer

The Answer of Memphis Co.is considering purchasing a machine for $83,200 that will increase cash flows by $40,000 in the first year,$30,000 the second year,and $25,000 the third year.The machine will have no residual value.The minimum rate of return is 10 percent.The present value factors,at 10 percent,for the three years are 0.909,0.826,and 0.751,respectively. 
-Using the above information for Memphis,the machine's net present value is
A)$21,800.
B)($3,285).
C)$79,915.
D)($4,286).