Required information SB Rooney, Inc. is considering the purchase of... The follo

Question

Required information SB Rooney, Inc. is considering the purchase of... The following information applies to the questions displayed below. Rooney, Inc. is considering the purchase of a new machine costing $730,000. The machine's useful life is expected to be 9 years with no salvage value. The straight-line depreciation method will be used. The net increase in annual after tax cash flow is expected to be $138,000, Rooney estimates its cost of capital to be 9%. (The present value of a $1 annuity for 9 years at 9% is 5.995, and the present value of $1 to be received in 9 years is 0.460.) MC Qu. 67 The net present value of the investment.. The net present value of the investment in the machine under consideration is:

Explanation / Answer

Net present value of machine = Present value of cash inflow-Present value of cash outflow

= (138000*5.995)-730000

Net present value of machine = 97310

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.