(Ignore income taxes in this problem.) Meharg Corporation is considering the pur

Question

(Ignore income taxes in this problem.) Meharg Corporation is considering the purchase of a machine that would cost $120,000 and would last for 5 years. At the end of 5 years, the machine would have a salvage value of $25,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $30,000. The company requires a minimum pretax return of 10% on all investment projects. The net present value of the proposed project is closest to: A) $14,905 B) -$6,270 C) $9,255 D) $18,730

Explanation / Answer

Hi, If you like my answer, please rate my answer first and according to my answer...that way only I can earn points. Thanks PV = -120000 FV = 25000 N = 5 PMT = 30000 I = 10% NPV = 9246.64 So answer is option c) 9255

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