Advantage Milling Devices is preparing to buy a new machine for precision milling of special metal alloys.This device can earn $300 per hour,and can run 3,000 hours per year.The machine is expected to be this productive for four years.If the interest rate is 6%,what is the net present value of the annual cash flows? What is the net present value if the interest rate is not 6%,but 9%? Why does present value fall when interest rates rise?

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The Answer of Advantage Milling Devices is preparing to buy a new machine for precision milling of special metal alloys.This device can earn $300 per hour,and can run 3,000 hours per year.The machine is expected to be this productive for four years.If the interest rate is 6%,what is the net present value of the annual cash flows? What is the net present value if the interest rate is not 6%,but 9%? Why does present value fall when interest rates rise?

Advantage Milling Devices Is Preparing to Buy a New Machine