(Ignore income taxes in this problem.) Mink, Inc., is considering the purchase of a machine that would cost $480,000 and would last for 7 years, at the end of which, the machine would have a salvage value of $82,000. The machine would reduce labor and other costs by $101,000 per year. Additional working capital of $2,000 would be needed immediately, all of which would be recovered at the end of 7 years. The company requires a minimum pretax return of 9% on all investment projects.
Required:
Determine the net present value of the project. Show your work!

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The Answer of (Ignore income taxes in this problem.) Mink, Inc., is considering the purchase of a machine that would cost $480,000 and would last for 7 years, at the end of which, the machine would have a salvage value of $82,000. The machine would reduce labor and other costs by $101,000 per year. Additional working capital of $2,000 would be needed immediately, all of which would be recovered at the end of 7 years. The company requires a minimum pretax return of 9% on all investment projects.
Required:
Determine the net present value of the project. Show your work!

(Ignore Income Taxes in This Problem