(Ignore income taxes in this problem.) The management of Matza Corporation is considering the purchase of a machine that would cost $370,000, would last for 9 years, and would have no salvage value. The machine would reduce labor and other costs by $63,000 per year. The company requires a minimum pretax return of 10% on all investment projects.
Required:
Determine the net present value of the project. Show your work!

Question

Quizplus · Accepted Answer

The Answer of (Ignore income taxes in this problem.) The management of Matza Corporation is considering the purchase of a machine that would cost $370,000, would last for 9 years, and would have no salvage value. The machine would reduce labor and other costs by $63,000 per year. The company requires a minimum pretax return of 10% on all investment projects.
Required:
Determine the net present value of the project. Show your work!

(Ignore Income Taxes in This Problem